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Arbitration and Choice: Taking Charge of the “New

Litigation” (Symposium Keynote Presentation)

Thomas J. Stipanowich*

TABLE OF CONTENTS
I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 402 R
II. WHY BUSINESS USERS COMPLAIN ABOUT
ARBITRATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 404 R
A. Arbitration Has Become the “New Litigation” . . . . . . 404 R
B. Why Business Users Fail to Take Advantage of the
Choice Inherent in Arbitration, Leading to a Gap
between Expectations and Experience . . . . . . . . . . . . . . . 406 R
1. Failure to plan with specific business goals in
mind . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 406 R
2. Difficulty of designing an appropriate system
prospectively, before disputes arise . . . . . . . . . . . . . 406 R
3. Inexperience of transaction counsel . . . . . . . . . . . . . 407 R
4. Realities of the negotiating process; parties’
differing goals and priorities . . . . . . . . . . . . . . . . . . . . 408 R
5. Limited guidance, range of models from arbitral
institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 408 R
6. Post-dispute realities; the arbitration spiral . . . . . 410 R
C. Choice Imperatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 411 R
1. Business imperatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . 412 R
2. Legal imperatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 413 R
3. Ethical imperatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 415 R
III. FIRST PRINCIPLES: A PROTOCOL FOR ARBITRATION
REFORM THROUGH CHOICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 418 R

* William H. Webster Chair in Dispute Resolution and Professor of Law, Pepperdine Univer-
sity School of Law; Academic Director, Straus Institute for Dispute Resolution. The author
wishes to thank Professor Katheryn M. Dutenhaver and participants in the DePaul Symposium
“Winds of Change: Solutions to Causes of Dissatisfaction with Arbitration,” DePaul University
College of Law, March 5-6, 2009, and Curt von Kann and members of the College of Commer-
cial Arbitrators Task Force on the Future of Arbitration for giving cause for reflection on this
symposium keynote presentation. Thanks also to Pepperdine School of Law Research Librarian
Gina McCoy and Pepperdine Law/Straus Institute students Angela Eastman, Jonathan Loch,
Paula Pendley and Catie Royal for their valuable research assistance.

401

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402 DEPAUL BUSINESS & COMMERCIAL LAW JOURNAL [Vol. 7:401

A. Move Beyond “One-Size-Fits-All Arbitration” to Fit

Process to Priorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 418 R
1. Identifying client goals and priorities . . . . . . . . . . . 418 R
2. Considering arbitration as part of a systematic
approach to conflict management . . . . . . . . . . . . . . . 420 R
3. Custom-tailoring arbitration . . . . . . . . . . . . . . . . . . . . 421 R
B. Make Clear Choices Regarding Limits on Cycle
Time and Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 424 R
1. The tension between economy and other goals . 424 R
2. Expedited or streamlined rules and their key
features . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 425 R
3. Other considerations for more efficient
arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 430 R
C. Make Clear Choices Regarding Discovery . . . . . . . . . . . 432 R
1. Making discrete choices. . . . . . . . . . . . . . . . . . . . . . . . . 434 R
2. Document exchange and discovery . . . . . . . . . . . . . 435 R
3. Limits on depositions . . . . . . . . . . . . . . . . . . . . . . . . . . . 437 R
4. Giving arbitrators the “last word” . . . . . . . . . . . . . . 437 R
5. E-discovery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 438 R
6. Other considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 440 R
D. Avoid Unnecessary Judicial Intrusion . . . . . . . . . . . . . . . 443 R
1. Increased cost and cycle time through
questionable choice-making: agreements to
expand judicial review . . . . . . . . . . . . . . . . . . . . . . . . . . 443 R
2. Alternatives to expanded judicial review;
appellate arbitration processes . . . . . . . . . . . . . . . . . . 447 R
E. Select Service Providers that “Get It” . . . . . . . . . . . . . . . 448 R
1. Dispute resolution institutions . . . . . . . . . . . . . . . . . . 448 R
2. Individual neutrals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 450 R
3. Dispute resolution counsel . . . . . . . . . . . . . . . . . . . . . . 452 R
IV. CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 454 R

I. INTRODUCTION
Despite meaningful efforts to promote better practices and ensure
quality among arbitrators and advocates, criticism of American arbi-
tration is at a crescendo.1 Much of this criticism stems from standard
arbitration procedures that have taken on the trappings of litigation—
extensive discovery and motion practice, highly contentious advocacy,

1. See generally Thomas J. Stipanowich, Arbitration: The “New Litigation,” 2010 U. ILL. L.
REV. 1 (forthcoming Jan. 2010) available at http://ssrn.com/abstract=1297526 [hereinafter Stipa-
nowich, New Litigation] (analyzing current trends affecting perception and practice in commer-
cial arbitration).

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2009] ARBITRATION AND CHOICE 403

long cycle time and high cost.2 While many—perhaps most—business

users still prefer arbitration to court trial because of other procedural
advantages,3 cost and time concerns usually head the list of complaints
about arbitration;4 clients and counsel wonder aloud what happened
to the economical and efficient alternative to the courtroom of popu-
lar lore.5 Paradoxically, concerns about the absence of appeal on the
merits in arbitration—a fundamental distinction between arbitration
and court trial—have caused some to go so far as to craft provisions
calling for judicial review for errors of law or fact in awards.6
Ironically, even as arbitration is taking on more of the trappings of
court trial, court trial itself may change dramatically. A recent study
co-sponsored by the American College of Trial Lawyers calls for
sweeping reforms in discovery, motion practice, and other contribu-
tors to the expense and delay that have crippled the U.S. legal
system.7
It is time to return to fundamentals in American arbitration. Those
seeking economy, efficiency, and a true alternative to the courthouse
may need more than good arbitrators. Real change must begin with
the commitment of business users to thoughtful, informed considera-
tion of discrete process choices that lay the groundwork for a particu-
lar kind of arbitration—whether they seek a highly streamlined, short,
and sharp process with tight time frames and firmly bounded discov-
ery, a private version of federal court litigation or something in be-
tween. Absent specific user guidance, arbitration under modern,
broadly discretionary procedures is primarily a product of the interac-

2. Id. at 6-27.
3. FULBRIGHT & JAWORSKI, U.S. CORPORATE COUNSEL LITIGATION TRENDS SURVEY RE-
SULTS 18 (2004) [hereinafter FULBRIGHT 2004 SURVEY]; Michael T. Burr, The Truth About
ADR: Do Arbitration and Mediation Really Work? 14 CORP. LEGAL TIMES 44, 45 (2004).
4. See, e.g., System Slowdown: Can Arbitration Be Fixed?, INSIDECOUNSEL, May 2007, at 51;
Lou Whiteman, Arbitration’s Fall from Grace, LAW.COM IN-HOUSE COUNSEL, July 13, 2006,
available at http://www.law.com/jsp/ihc/PubArticleIHC.jsp?id= 900005457792; Leslie A. Gordon,
Clause for Alarm, ABA J., Nov. 2006, at 19. Barry Richard, Corporate Litigation: Arbitration
Clause Risks, NAT’L L.J., June 2004, at 3. See also Benjamin J.C. Wolf, On-line But Out of Touch:
Analyzing International Dispute Resolution Through the Lens of the Internet, 14 CARDOZO J.
INT’L & COMP. L. 281, 306-07 (2006) (describing the disadvantages of arbitration, including costs
similar to litigation and lengthy discovery process and hearings); see also Mediation—Knocking
Heads Together—Why go to court when you can settle cheaply, quickly and fairly elsewhere?, THE
ECONOMIST, Feb. 3, 2000, at 62 (noting arbitration is no “cheaper, fairer or even quicker” than
trial).
5. Stipanowich, New Litigation, supra note 1, at 9.
6. See infra Part III.D.
7. See INST. FOR THE ADVANCEMENT OF THE AM. LEGAL SYS., FINAL REPORT ON THE JOINT
PROJECT OF THE AMERICAN COLLEGE OF TRIAL LAWYERS TASK FORCE ON DISCOVERY AND
THE INSTITUTE FOR THE ADVANCEMENT OF THE AMERICAN LEGAL SYSTEM (2009) [hereinafter
FINAL REPORT ON LITIGATION REFORM].

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404 DEPAUL BUSINESS & COMMERCIAL LAW JOURNAL [Vol. 7:401

tion of advocates (who are often occupationally prone to see only

their conflicting agendas) and arbitrators, the best of whom have lim-
ited ability to blend efficiency and economy with fundamental fairness
without the cooperation of the parties.8
For most business users, process choice is an illusion in the absence
of appropriate alternative models from arbitration provider institu-
tions.9 Clients and counsel tend to have neither the time nor the ex-
pertise to craft their own process templates, and usually need
straightforward, dependable guidance from those that develop and ad-
minister the procedures upon which they rely. Provider institutions
are awakening to the need to promote real choices in arbitration, but
much remains to be done.10
Finally, users require arbitrators and advocates capable of and will-
ing to promote the goals underpinning the agreement to arbitrate.
Among those who promote themselves to business clients, wide varia-
tions exist in personal philosophy, approach, pertinent knowledge,
and ability.11 Users must practice greater discernment in their
selection.
To help users establish and effectively realize goals in arbitration
and dispute resolution, the American College of Commercial Arbitra-
tors established a task force to promulgate simple protocols for busi-
ness users and other key stakeholder groups.12 These protocols are
not intended as a substitute for the development of appropriate rules
or detailed practice guides, nor are they a proxy for the hard business
of real choice-making by business clients and counsel. They are, how-
ever, an essential first step in refocusing on the fundamentals. This
article suggests a possible blueprint for a Protocol for Business Users
of Arbitration.

II. WHY BUSINESS USERS COMPLAIN ABOUT ARBITRATION

A. Arbitration Has Become the “New Litigation”
In the realm of commercial arbitration, perception, practice, and ex-
perience have been shaped by several trends.13 The most important of

8. See infra Part II.B.5.

9. See id.
10. See infra Parts III.B., C. (discussing emerging templates for streamlined processes and
controlling discovery); Part III.E.1 (discussing selection of institution to provide arbitration
services).
11. See infra Part III.E.2 (discussing selection of arbitrators and advocates).
12. The author and former judge Curtis E. von Kann are co-chairs of the effort, which will lay
the groundwork for a Summit on Commercial Arbitration in Washington, D.C. in October, 2009.
13. See generally Stipanowich, New Litigation, supra note 1.

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2009] ARBITRATION AND CHOICE 405

these is the expansion of arbitration into the role of full-blown surro-

gate for civil trial. As a consequence, current practice under modern
arbitration procedures is often a close private analogue to civil trial.14
Among many aspects of this phenomenon, two elements—the expan-
sion of motion practice and discovery—stand out as primary contribu-
tors to greater expense and longer cycle time, which are themselves
leading causes of complaint by business users of arbitration.15
The urgency of these concerns was brought home by the publication
of a final report co-sponsored by a task force of the American College
of Trial Lawyers, which found that “because of expense and delay,
both civil bench trials and civil jury trials are disappearing.”16 The re-
port recommends a wide range of critical changes in the landscape of
American litigation, including an end to the “‘one size fits all’ ap-
proach of the current federal and most state rules.”17
It is truly ironic that similar concerns exist in the context of arbitra-
tion, which is first and foremost a creature of contract and therefore
inherently highly flexible. Expanded arbitral motion practice and dis-
covery have developed within the framework of leading commercial
arbitration rules, which typically afford arbitrators and parties consid-
erable “wiggle room” on matters of procedure. While many business
clients may be perfectly comfortable with this status quo, in which the
character, length and cost of the arbitration process are heavily depen-
dent on the interaction of arbitrators and advocates, others may desire
a higher degree of control—or discrete modes of arbitration for differ-
ent circumstances. For the latter clients, accepting without question a
one-size-fits-all set of arbitration rules is tantamount to a forfeiture of
their best chance to achieve harmony between process and business
priorities.
Let us consider the practical realities causing this state of affairs,
and the gap users perceive between expectation and experience.

14. Id. See supra Part I. Parallel trends include the “quiet revolution” in informal dispute
resolution spearheaded by the explosive growth of mediation, which now aggressively competes
with arbitration in the dispute resolution marketplace; and the widespread use (and, sometimes,
abuse) of arbitration in adhesion contracts binding employees and consumers, and legislative,
judicial and scholarly responses that have a “spillover” effect on business arbitration. Id. See
supra Part I.; Part II.
15. Id. See supra Parts I.B.1., 2.
16. FINAL REPORT ON LITIGATION REFORM, supra note 7, at 3.
17. See generally id.

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406 DEPAUL BUSINESS & COMMERCIAL LAW JOURNAL [Vol. 7:401

B. Why Business Users Fail to Take Advantage of the Choice

Inherent in Arbitration, Leading to a Gap between
Expectations and Experience
Since arbitration is a creature of contract, and therefore wholly sub-
ject to the will of business users, one may reasonably wonder why par-
ties should ever perceive a dissonance between their expectations and
their actual experience. The reasons are several.

1. Failure to plan with specific business goals in mind

Dissatisfaction with arbitration is, among other things, a reflection
of the failure of companies to apply effective business management
principles to the handling of business disputes. Arbitration and other
dispute resolution approaches are seldom employed in the context of
a systematic effort to manage conflict pursuant to clearly defined busi-
ness goals and priorities. Recent studies of the ways businesses handle
conflict make clear that most companies have not embraced this chal-
lenge strategically; instead, they are reactive and ad hoc in their ap-
proach to “legal problems.”18
Such realities represent a significant missed opportunity for busi-
nesses—a failure to procure an important advantage not only for the
legal department but for business relationships and, ultimately, the
bottom line. Legal issues are a significant factor in the environment of
business, demanding around one-fifth of the working hours of leading
executives.19 Yet business managers may not see the strategic implica-
tions of conflict and other “legal” matters, instead viewing them as
distinct from business operations.20 Similarly, legal counsel may not
see how legal disputes impact business operations and strategies.

2. Difficulty of designing an appropriate system prospectively,

before disputes arise
Timing is another significant barrier to the exercise of effective
choice regarding arbitration. The time to begin laying the groundwork
for managing conflict within a contractual relationship is before the
contract is negotiated and drafted. Because such provisions are usu-

18. See DAVID B. LIPSKY & RONALD L. SEEBER, THE APPROPRIATE RESOLUTION OF CORPO-
RATE DISPUTES—A REPORT ON THE GROWING USE OF ADR BY U.S. CORPORATIONS 9-14
(1998); David B. Lipsky & Ronald L. Seeber, In Search of Control: The Corporate Embrace of
ADR, 1 U. PA. J. LAB. & EMP. L. 133, 144-45 (1998). See also Thomas J. Stipanowich, ADR and
the ‘Vanishing Trial’: The Growth and Impact of Alternative Dispute Resolution, 1 J. EMPIRICAL
LEGAL STUD. 843, 893 (2004) [hereinafter Stipanowich, Vanishing Trial].
19. GEORGE J. SIEDEL, USING THE LAW FOR COMPETITIVE ADVANTAGE 3 (2002).
20. Id. at 6.

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2009] ARBITRATION AND CHOICE 407

ally fashioned at the outset, before any disputes have arisen, however,
tailoring the “right” process involves a considerable degree of guess-
work. Looking ahead to a long-term relationship, one might anticipate
conflicts of varying character, size, and complexity; crafting, at the
outset, procedures that will prove effective across a range of very dif-
ferent dispute scenarios is a challenging proposition.21 Such difficulties
often discourage contract drafters from trying to develop tailored ar-
bitration provisions, and encourage reliance on generic boilerplate
that postpones many decisions about process until the time of arbitra-
tion. Of necessity, such provisions tend to give arbitrators and parties
considerable discretion to deal with circumstances as they find them.22

3. Inexperience of transaction counsel

Yet another obstacle to maximizing the benefits of arbitration is
lack of experience among many of those chiefly responsible for con-
tract planning and drafting. Most legal advocates representing busi-
ness clients now have at least some experience with arbitration,
mediation, and other contract-based approaches for resolving conflict,
and many of them possess important insights about what kinds of pro-
cedures should find their way into commercial contracts.23 Usually,
however, it is not the “advocates” or “dispute resolution specialists”
but transactional lawyers who negotiate and draft contracts and estab-
lish the template for resolving business conflicts. While one might ex-
pect business lawyers’ superior understanding of the business agenda
and of the dynamics of commercial relationships to translate into crea-
tive contractual provisions governing the management of conflict, this
is seldom the case. Although notable exceptions exist, many transac-
tional lawyers have little or no experience in mediation, arbitration, or
other forms of dispute resolution.24 This inexperience may be re-
flected at the drafting stage.
In addition to causing counsel to miss opportunities to take a strong
hand in making process choices, lack of pertinent experience and good
judgment contribute to bad process choices. Some drafters, fearful
that the absence of appeal on the merits will leave their arbitrating
client helpless in the wake of an “irrational” award, insert provisions

21. See COMMERCIAL ARBITRATION AT ITS BEST: SUCCESSFUL STRATEGIES FOR BUSINESS
USERS 35-62 (Thomas J. Stipanowich & Peter H. Kaskell eds., 2001) [hereinafter COMMERCIAL
ARBITRATION AT ITS BEST] (delineating the issues the drafter of an arbitration clause should
consider in crafting effective arbitration procedures).
22. Id.
23. LIPSKY & SEEBER, supra note 18, at 9-14.
24. John M. Townsend, Drafting Arbitration Clauses: Avoiding the Seven Deadly Sins, 58 APR
DISP. RESOL. J. 28, 30 (2003).

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408 DEPAUL BUSINESS & COMMERCIAL LAW JOURNAL [Vol. 7:401

for judicial review for errors of law or fact.25 This costly and poten-
tially perilous “cure” may end up being worse than the perceived mal-
ady,26 which is doubly unfortunate since less costly and risky
alternatives exist.27

4. Realities of the negotiating process; parties’

differing goals and priorities
While negotiating and drafting business contracts, lawyers and cli-
ents often have limited time to address the myriad legal issues sur-
rounding a transaction and tend to give relatively little attention to
provisions for managing conflict between contracting partners. An-
other reason that dispute resolution provisions are usually accorded
low priority in negotiations is that parties intent on sealing a deal are
reluctant to dwell on the subject of relational conflict.28 Such discus-
sions are usually left until the eleventh hour, with slight emphasis on
details.
Getting into the details, of course, raises the possibility that parties’
very different goals and priorities will surface, enhancing the difficulty
of completing the present deal or at least complicating the discussion.
Under the circumstances, it is only natural that counsel tend to cir-
cumvent such discussions by falling back on the most convenient alter-
native—standard published procedures of leading institutional
providers of dispute resolution services.

5. Limited guidance, range of models from arbitral institutions

The published commercial arbitration procedures of major provider
institutions offer a number of perceived advantages. For busy lawyers,
they offer a seemingly “tried and true” alternative to the minefield of
customized drafting combined with an administrative support system
and access to lists of neutrals. Unless a client is entering into a signifi-
cant commercial relationship or preparing a contract template that
will be used multiple times,29 it is unrealistic to expect counsel to
spend considerable time planning and drafting arbitration agreements.
Even in circumstances where more attention is appropriate, drafting
dispute resolution agreements from whole cloth without reliance on
published templates can be a dicey proposition. It therefore makes

25. See infra Part III.D.

26. See infra Part III.D.1.
27. See infra Part III.D.2.
28. Id.
29. See infra Part III.A.3 (discussing options for “tailoring” arbitration provisions).

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2009] ARBITRATION AND CHOICE 409

sense to examine and compare what different administrative institu-

tions have to offer.
A reference to standard boilerplate is also much less likely to raise
the eyebrows of those on the other side of the negotiating table. To
the extent organizations such as JAMS, the American Arbitration As-
sociation (AAA), the International Institute for Conflict Prevention
& Resolution (CPR) or other national or regional entities are known
and respected in the marketplace, incorporating their rules is less
likely to entail a drain on negotiators’ time or an expenditure of a
party’s “negotiating points.”
But while drafters seeking guidance from the websites of institu-
tions sponsoring arbitration have a seemingly wide variety of choices,
few readily available and reliable guideposts exist that dependably
link specific process alternatives to the varying goals and expectations
parties may bring to arbitration.30 Moreover, despite devoting much
time and effort to developing and promoting institutional rules, most
organizations offer a limited range of process templates for commer-
cial arbitration. For example, some institutions heavily emphasize a
single set of commercial arbitration rules which may be excellent for
certain purposes but less advantageous for others (such as small and
medium cases); by incorporating that institution’s rules in an arbitra-
tion agreement, however, parties will be bound to employ those rules
for whatever disputes arise.31
Recently, more attention is being given to the diverse needs of busi-
ness users of arbitration. For example, there has been a trend among
leading U.S. arbitration institutions to create discrete templates for
expedited or streamlined arbitration.32 Moreover, in light of growing
concerns about the scope and cost of arbitration-related discovery, va-

30. Leading arbitration institutions provide some basic guidance for drafters about ways of
incorporating their own rules in the contract. See, e.g., JAMS, JAMS GUIDE TO DISPUTE RESO-
LUTION CLAUSES FOR COMMERCIAL CONTRACTS (2006), http://www.jamsadr.com/images/PDF/
Commercial_Arbitration_Clauses-2006.PDF. One relatively comprehensive set of guideposts for
business users is the product of the CPR Commission on the Future of Arbitration. See generally
COMMERCIAL ARBITRATION AT ITS BEST, supra note 21. Even this extensive guide, however,
does not approach process questions from the standpoint of various specific user goals. A more
recent CPR publication does, however, address many key drafting issues. CPR INST. FOR DIS-
PUTE RESOL., CPR DRAFTER’S DESKBOOK (Kathleen Scanlon, ed. 2002) [hereinafter DRAFTER’S
DESKBOOK].
31. See generally Thomas J. Stipanowich, At the Cutting Edge: Conflict Avoidance and Resolu-
tion in the Construction Industry, ADR & THE LAW 65-86 (1997) (describing rationale for tiered
construction procedures) [hereinafter Stipanowich, Cutting Edge].
32. See infra Part III.B.

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410 DEPAUL BUSINESS & COMMERCIAL LAW JOURNAL [Vol. 7:401

rious institutions have devoted attention to that subject, and choices

may now be discerned among existing procedures.33

6. Post-dispute realities; the arbitration spiral

When disputes arise, the expectation of an efficient and economical

process may be undermined by the interplay of several factors that
cause arbitration proceedings to spiral out of control. Corporate coun-
sel often avoid active responsibility for managing conflict, relying in-
stead on outside advocates. If the latter are not in tune with the
client’s goals, the consequences may be unfortunate, as reflected in
the conclusion of one corporate general counsel:
Arbitration is often unsatisfactory because litigators have been
given the keys . . . and they run it exactly like a piece of litigation.
It’s the corporate counsel’s fault [for] simply turning over the keys
to a matter.34
As the quote makes clear, some attorneys disserve their clients by
failing to appreciate and make appropriate allowances for the signifi-
cant differences between arbitration and litigation. Of course, the
problem may spring from a client’s failure to make its needs and ex-
pectations plain. It may also reflect the differing interests of the client
and outside counsel, especially when the latter is engaged to bill by
the hour and is pressured to maximize hours and resulting profits for
his law firm.
The most notable impact of a trial-like approach in arbitration in-
volves discovery. Although many arbitrators and some arbitration
rules aim to hold the line on excessive discovery,35 it is not unusual for
legal advocates to agree to trial-like procedures for discovery, even to

33. See infra Part III.C.

34. Stipanowich, Vanishing Trial, supra note 18, at 895 (quoting Jeffrey W. Carr, Vice Presi-
dent and General Counsel, FMC Technologies, Inc.). See also David B. Lipsky & Ronald L.
Seeber, In Search of Control: The Corporate Embrace of ADR, 1 U. PA. J. LAB. & EMP. L. 133,
142 (1998); Craig A. McEwen, Managing Corporate Disputing: Overcoming Barriers to the Effec-
tive Use of Mediation for Reducing the Cost and Time of Litigation, 14 OHIO ST. J. DISP. RESOL.
1 (1998); John Lande, Failing Faith in Litigation? A Survey of Business Lawyers’ and Executives’
Opinions 3 HARV. NEGOTIATION L. REV. 51 (1998).
35. See, e.g., INT’L INST. FOR CONFLICT PREVENTION & RESOL. RULES FOR NON-ADMINIS-
TERED ARBITRATION R. 11 (2007) (“The Tribunal may require and facilitate such discovery as it
shall determine is appropriate. . .taking into account the needs of the parties and the desirability
of making discovery expeditious and cost-effective.”), available at http://www.cpradr.org/Clauses
Rules/2007CPRRulesforNonAdministeredArbitration/tabid/125/Default.aspx [hereinafter CPR
RULES]. See also JAMS COMPREHENSIVE ARBITRATION RULES & PROCEDURES R. 22 (2007),
available at http://www.jamsadr.com/rules/comprehensive.asp [hereinafter JAMS RULES]; AM.
ARBITRATION ASS’N COMMERCIAL RULES & MEDIATION PROCEDURES R. R-30 (2007), availa-
ble at http://www.adr.org/sp.asp?id=22440 [hereinafter AAA COMMERCIAL RULES].

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the extent of employing standard civil procedural rules.36 Trial prac-

tice, with its heavy emphasis on pre-hearing motion practice and in-
tensive discovery, is reinforced by ethical rules enshrining the model
of zealous advocacy.37 For lawyers accustomed to full-fledged discov-
ery, sufficing with anything less may seem tantamount to malpractice.
Again, the heavy-discovery bias tends to be reinforced by the prospect
of hefty hourly fees generated by extensive discovery.
Arbitrators, intent upon striking a balance between court-like due
process and efficiency, may be reluctant to push parties to limit such
practices or to keep to a schedule.38 These tendencies may be
strengthened by concerns about having their award subjected to a mo-
tion to vacate. The reluctance to limit discovery may also reflect an
arbitrator’s desire to avoid offending anyone in the hope of securing
favorable word-of-mouth and future appointments.39

C. Choice Imperatives
Business users, guided by knowledgeable and experienced counsel,
are in the best position to determine how and when arbitration will be
brought to bear on business disputes, and the kind of arbitration pro-
cess to be employed.40 If business parties want arbitration to be a truly
expeditious and efficient alternative to court, then they have to as-
sume control of the process and not abdicate the responsibility to
outside counsel—in other words, principals, and not agents, should act
as principals.41 This must include not only making choices after dis-
putes arise, but also when contracting. Ideally, choice-making begins
even earlier with strategic discussions regarding conflict management,
in which arbitration is considered among a variety of tools and
approaches.42

36. As arbitrator, the author has in past cases been confronted by a prior agreement of coun-
sel for arbitrating parties to utilize the discovery provisions of the Federal Rules of Civil Proce-
dure in arbitration. It is often possible to persuade the parties to forego requests for admission
and interrogatories and to strictly limit the number of depositions, and also to closely supervise
the discovery process to avoid unnecessary delays.
37. See MODEL RULES OF PROF’L CONDUCT R. 1.3 cmt. (2007) [hereinafter MODEL RULES].
38. See id. (discovery has been used as a tactical weapon to impose excessive costs on the
opposing party).
39. See Clyde W. Summers, Mandatory Arbitration: Privatizing Public Rights, Compelling the
Unwilling to Arbitrate, 6 U. PA. J. LAB. & EMP. L. 685, 717 (2004) (arguing that arbitrators may
be less restrictive with discovery than judges because of their concern over obtaining future
appointment as an arbitrator).
40. This paragraph is a close paraphrase of a paragraph in Stipanowich, New Litigation, supra
note 1, at 8.
41. Cf. BENJAMIN SILLS, THE SOUL OF THE LAW 88 (1994).
42. See generally SIEDEL, supra note 19.

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In the effort to define client goals and translate these goals into
meaningful process choices, counsel plays a critical role. As “gate-
keeper[s] to legal institutions and facilitator[s] of . . . transactions,”43
lawyers “exercise considerable power over their clients . . . [and]
maintain control over the course of [dispute resolution].”44
Despite the often daunting obstacles confronting client and counsel
in making better choices regarding arbitration and dispute resolution,
legal advisors should devote more time and energy to overcoming cur-
rent obstacles, and business clients should take heed and support
these efforts. Effective process choices provide tangible benefits for
businesses and avoid costly and delay-producing legal consequences.
These realities underpin lawyers’ ethical obligations to actively pro-
mote consideration of choices regarding arbitration.

1. Business imperatives
When utilized by a legal department as part of a strategic effort to
serve broader business goals, arbitration and other forms of dispute
resolution may benefit a company. A 2003 AAA-sponsored market
study involving telephone interviews with 254 corporate counsel
sought to segregate and compare companies based on indices of sev-
eral key characteristics.45 The study analyzed companies in which legal
staff is more closely integrated into the corporate planning process,
where senior management is focused on preserving relationships and
settling cases instead of adopting aggressive approaches, and litigation
is downplayed in favor of alternative dispute resolution approaches.46
It concluded such companies are likely to enjoy strengthened relation-
ships with suppliers and business partners and have legal departments
that perceive themselves as less “stretched” to accomplish their role
within a given budget.47 A strategic approach that effectively inte-
grates arbitration processes into a larger matrix of approaches to man-
age and resolve conflict in accordance with broader business goals is
arguably an effective way of ensuring that goals and expectations are
achieved.
Several recent surveys of corporate counsel demonstrate that while
many corporate counsel perceive arbitration as presenting key advan-

43. William L.F. Felstiner et al., The Emergence and Transformation of Disputes: Naming,
Blaming, Claiming . . ., 15 LAW & SOC. REV. 631, 645 (1980-81).
44. Id.
45. AMERICAN ARBITRATION ASSOCIATION, DISPUTE-WISE BUSINESS MANAGEMENT—IM-
PROVING ECONOMIC AND NON-ECONOMIC OUTCOMES IN MANAGING BUSINESS CONFLICTS 4
(2003).
46. Id. at 8.
47. Id.

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tages over litigation, many corporate lawyers are dissatisfied with ar-
bitration, often because of related costs and delays.48 Sophisticated
guidance is needed on how and when to resort to arbitration, and
what procedures are best for specific circumstances. Without such di-
rection, a client risks, among other things, unforeseen legal
consequences.

2. Legal imperatives
Choices regarding arbitration—whether made consciously or by de-
fault—have potentially significant legal consequences for clients. The
published cases and literature are replete with examples of parties ex-
periencing disappointment, delay, or disruption prior to, during, or af-
ter arbitration as the result of:
• a lack of precision in describing the process, and confusion about
whether a particular agreement is enforceable under arbitration
statutes;49
• uncertainty about the consequences of a failure to follow pre-
scribed steps in a dispute resolution process;50
• a lack of clarity about whether various issues are to be resolved
by courts or arbitrators;51
• a multi-party dispute in which some of the parties in interest are
not subject to an arbitration clause;52

48. See Stipanowich, New Litigation, supra note 1, Part I.D. See also FULBRIGHT 2004 SUR-
VEY, supra note 3, at 18. FULBRIGHT & JAWORSKI L.L.P., FOURTH ANNUAL LITIGATION TRENDS
SURVEY FINDINGS 18, 30 (2007), available at http://www.fulbright.com/mediaroom/files/2007/
FJ6438-LitTrends-v13.pdf; Gerald F. Phillips, Is Creeping Legalism Infecting Arbitration?, DISP.
RES. J., Feb.-Apr. 2003, at 37, 38 (noting that arbitration has become a legalistic method of
adjudication); Michael T. Burr, The Truth About ADR: Do Arbitration and Mediation Really
Work? 14 CORP. LEGAL TIMES 44, 45 (2004). See generally QUEEN MARY, UNIV. OF LONDON,
SCH. OF INT’L ARBITRATION & PRICEWATERHOUSE COOPERS, INTERNATIONAL ARBITRATION:
CORPORATE ATTITUDES AND PRACTICES 22 (2006) (expense and time were seen as the leading
disadvantages of international arbitration); QUEEN MARY, UNIV. OF LONDON, SCH. OF INT’L
ARBITRATION & PRICEWATERHOUSE COOPERS, INTERNATIONAL ARBITRATION: CORPORATE
ATTITUDES AND PRACTICES 5 (2008) (5% of counsel were “rather or very disappointed” with
international arbitration, based on their experience of increased costs of arbitration and delays
to proceedings).
49. Thomas J. Stipanowich, The Arbitration Penumbra: Arbitration Law and the Rapidly
Changing Landscape of Dispute Resolution, 8 NEV. L. J. 427, 450-56 (2007) (discussing basis for
enforcement of non-binding arbitration and one-off dispute resolution provisions).
50. Id. at 457-62 (discussing multi-step processes and “interface” issues).
51. Id. See also IAN R. MACNEIL, et al., FEDERAL ARBITRATION LAW: AGREEMENTS,
AWARDS AND REMEDIES UNDER THE FEDERAL ARBITRATION ACT § 36.5.5 (1996) (discussing
jurisdictional issues that come into play with ongoing contracts concerning relief).
52. Robert W. DiUbaldo, Evolving Issues in Reinsurance Disputes, 35 FORDHAM URB. L.J. 83,
84-89 (2008) (providing an overview of the consolidation issue as treated across the circuit
courts); Certain Underwriters at Lloyd’s London v. Westchester Fire Ins. Co., 489 F.3d 580 (3d
Cir. 2007) (Petitioner argued demands for arbitration against it should be stayed, as six separate
contracts, each with its own arbitration clause, did not provide for the consolidation of arbitra-

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414 DEPAUL BUSINESS & COMMERCIAL LAW JOURNAL [Vol. 7:401

• a lack of understanding about the roles of party-appointed arbi-

trators and their obligations to disclose conflicts of interest;53
• a concern about the amount and form of discovery;
• a failure to provide effective protection for trade secrets and
other proprietary information;54
• a failure to foresee the potentially negative consequences of a
customized provision for expanded or contracted judicial review
of an award.55
In all of these situations, unanticipated litigation or other complica-
tions may be avoided by careful planning, which in some cases means
looking beyond the standard procedures provided by arbitration insti-
tutions.56 However, we are not to the point where even a sizable mi-
nority of practitioners have the knowledge and experience to offer
effective guidance on such issues.57 Whether or not arbitration would
be judicially denominated a “specialty,”58 it has become a relatively
complex and specialized area of practice. An effective counselor

tion proceedings, or for consolidation with proceedings under other contracts. In light of the
parties’ agreement to arbitrate their disputes, contractual silence as to the consolidation issue,
and “longstanding federal policy favoring arbitration” the court held that the decision whether
to consolidate was a procedural issue to be resolved by the arbitrator) (citing Green Tree Finan-
cial Corp. v. Bazzle, 539 U.S. 444 (2003); Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79
(2002)). See also Employers Ins. Co. of Wausau v. Century Indem. Co., 443 F.3d 573 (7th Cir.
2006) (holding that the question of whether an arbitration agreement between reinsurer and
reinsured prohibited consolidated arbitration with other reinsurers was a procedural issue for
the arbitrator and not a question of arbitrability for the court).
53. Delta Mine Holding Co. v. AFC Coal Properties, Inc., 280 F.3d 815 (8th Cir. 2001), cert.
denied, 123 S. Ct. 87 (2002); Merit Ins. Co. v. Leatherby Ins. Co. 714 F.2d 673 (7th Cir. 1983),
cert. denied, 464 U.S. 1009 (1983) (standards of disclosure applied to party-appointed arbitrators
depend on the tradeoff between expertise and impartiality).
54. See Merrill Lynch v. McCollum, 469 U.S. 1127, 1129 (1985); Anahit Tagvoryan, A Secret in
One District Is No Secret in Another: The Cases of Merrill Lynch and Preliminary Injunctions
under the FAA, 6 PEPP. DISP. RESOL. 147 (2006) (“Because jurisdictions are split as to whether
courts have authority under the FAA to grant injunctive relief in a dispute that is subject to
arbitration, Merrill Lynch has experienced unnecessary confusion as to where, when, and how its
trade secrets are protected.”); but cf. IBM & Gartner Group Settle Trade Secret Suit by Creating
Future Arbitration Panel, ALTERNATIVES TO THE HIGH COST OF LITIG., Sept. 1984, at 8.
55. See infra Part III.D. See also Amy J. Schmitz, Ending a Mud Bowl: Defining Arbitration’s
Finality through Functional Analysis, 37 GA. L. REV. 123, 168 nn.269 & 270 (2002) [hereinafter
Schmitz, Mud Bowl].
56. See Howard J. Aibel & George H. Friedman, Drafting Dispute Resolution Clauses in Com-
plex Business Transactions, 51 DISP. RESOL. J. 17, 68 (1996).
57. See generally Suzanne J. Schmitz, Giving Meaning to the Second Generation of ADR Edu-
cation: Attorneys’ Duty to Learn about ADR and What They Must Learn, 1999 J. DISP. RESOL. 29
(1999); Ronald J. Offenkrantz, Negotiating and Drafting the Agreement to Arbitration in 2003:
Insuring Against a Failure of Professional Responsibility, 8 HARV. NEGOT. L. REV. 271 (2003).
58. See RONALD E. MALLEN & JEFFREY M. SMITH, LEGAL MALPRACTICE 2:32 (2008 ed.)
(legal specialization is a significant factor in malpractice litigation, usually requiring a higher
standard of care and expert testimony).

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should draw upon a well of direct experience and an understanding of

current case law, procedural options, and applicable standards.59

3. Ethical imperatives
To help their clients achieve legitimate business goals and avoid un-
fortunate legal consequences, lawyers have ethical obligations to com-
petently counsel their clients about the range of appropriate methods
of managing and resolving conflict in particular transactions or rela-
tional settings.60 This requires not only the requisite “legal knowledge,
skill, thoroughness and preparation,”61 but also an understanding of
the client’s objectives62 and how arbitration and dispute resolution
tools may serve them.

59. Modern listserves are becoming an important source of information for neutrals and prac-
titioners in arenas such as arbitration and dispute resolution. Every day, the author receives
multiple messages regarding new decisions, new or changing practice standards and other impor-
tant developments.
60. See MODEL RULES, supra note 37, at R. 1.1; See Carrie Menkel-Meadow, The Limits of
Adversarial Ethics, in DEBORAH L. RHODE, ETHICS IN PRACTICE 136 (2000). Some legislation
and bar opinions have established a specific predicate for lawyer consultations regarding dispute
resolution options. Some establish an affirmative duty to provide clients with information re-
garding alternatives to litigation. A Michigan Bar opinion states:
[A] [l]awyer has an obligation to recommend alternatives to litigation when an alterna-
tive is a reasonable course of action to further the client’s interests, or if the lawyer has
any reason to think that the client would find the alternative desirable . . . . While not
all options which are theoretically available need be discussed, any doubts about
whether a possible option is reasonably likely to promote the clients (sic) interests, as
well as any doubt about whether the client would desire the use of any particular op-
tion, should be resolved in favor of providing the information to the client and allowing
the client to render a decision.
Mich. Comm. on Ethics and Professional Responsibility, Formal Op. RI-262 (1996).
The Texas Lawyer’s Creed provides: “I will advise my client regarding the availability of medi-
ation, arbitration, and other alternative methods of resolving and settling disputes.” TEXAS LAW-
YER’S CREED § 2(11) (1989). The Georgia State Bar Rules and Regulations state:

A lawyer as adviser has a duty to advise the client as to various forms of dispute resolu-
tion. When a matter is likely to involve litigation, a lawyer has a duty to inform the
client of forms of dispute resolution which might constitute reasonable alternatives to
litigation.
Ga. Rules & Regulations for the Org. and Gov’t of the State Bar of Ga. R. 3-107, EC 7-5 (1999).
See generally Robert F. Cochran, ADR, the ABA, and Client Control: A Proposal that the Model
Rules Require Lawyers to Present ADR Options to Clients, 41 S. TEX. L. REV. 183, 188 (1999)
[hereinafter Cochran, ADR].
61. According the Model Rules of Professional Conduct,
A lawyer shall provide competent representation to a client. Competent representation
requires the legal knowledge, skill, thoroughness and preparation reasonably necessary
for the representation.
MODEL RULES, supra note 37, at R. 1.1.
62. MODEL RULES, supra note 37, at R. 1.2(a) (requiring lawyers to “consult with the client as
to the means by which . . . [client objectives] are pursued”).

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416 DEPAUL BUSINESS & COMMERCIAL LAW JOURNAL [Vol. 7:401

Today, contractual provisions for the resolution of disputes, includ-

ing terms for binding arbitration, are a regular feature of all kinds of
contracts. If the objective of representation is to negotiate or draft a
contractual agreement in furtherance of business goals, the manage-
ment of disputes may be an important element, although it is unlikely
to be uppermost in a client’s mind during the negotiation. Indeed, cli-
ents tend to shove it into the background of discussions, postpone its
treatment until the very last moment, or avoid discussing it entirely.63
It is incumbent upon the legal advisor to draw the subject to the cli-
ent’s attention in a timely manner (meaning, if at all possible, prior to
the negotiation) for “reasonable consultation” as to the means by
which the client’s objectives will be accomplished.64
Moreover, it is unreasonable to expect business clients to have the
specialized knowledge and skill required to craft such provisions, and
they should be able to rely upon legal counsel when making decisions
about how disputes should be handled.65 Although a basic under-
standing of dispute resolution choices may be straightforward,66 a
knowledgeable appraisal of choices in binding arbitration is beyond
most clients’ ability and requires counsel’s interpretation and
guidance.
To provide competent representation to their clients, counsel repre-
senting clients in the negotiation and drafting of agreements must
come equipped with knowledge of a wide variety of conflict resolution

63. See supra Part II.B.4.

64. ABA Model Rule 1.4 provides:
(a) A lawyer shall:
(1) promptly inform the client of any decision or circumstance with respect to
which the client’s informed consent, as defined in Rule 1.0(e), is required by
these Rules;
(2) reasonably consult with the client about the means by which the client’s objec-
tives are to be accomplished; . . .
(b) A lawyer shall explain a matter to the extent reasonably necessary to permit the
client to make informed decisions regarding the representation.
MODEL RULES, supra note 37, at R. 1.4 The Rules further explain,
As used above, “informed consent” denotes the agreement by a person to a proposed
course of conduct after the lawyer has communicated adequate information and expla-
nation about the material risks of and reasonably available alternatives to the proposed
course of conduct.
MODEL RULES, supra note 37, at R. 1.0(e).
65. Comment 2 to Model Rule 1.2 provides:
Clients normally defer to the special knowledge and skill of their lawyer with respect
to. . . technical, legal and tactical matters. Conversely, lawyers usually defer to the cli-
ent regarding such questions as the expense to be incurred and concern for third per-
sons who might be adversely affected.
MODEL RULES, supra note 37, at R. 1.2 cmt.
66. See, e.g., Cochran, ADR, supra note 60, at 186.

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mechanisms including stepped negotiation, mediation, and arbitration.

This should include not only an appreciation of the array of different
processes and their appropriate uses, but also thorough preparation to
ensure that a dispute resolution provision (which today is likely to
include multiple elements) is tailored to the client’s particular needs
and circumstances. Competent representation requires more than just
grabbing boilerplate provisions from the website of an institutional
provider. To the extent that the negotiator/drafter lacks the back-
ground or skills necessary to make a wise and judicious choice, he or
she should seek assistance from a more experienced colleague67 or
other appropriate source.
Lawyer-counselors are also encouraged to look beyond the legal is-
sues and consider “other factors that may be relevant to the client’s
situation.”68 In crafting appropriate dispute resolution provisions, or
in some cases whole “systems” for the resolution of disputes, one has
the opportunity to look beyond the narrow resolution of legal or fac-
tual disputes and the remedial shortcomings of litigation. An attorney
can craft frameworks that permit conflict to become the impetus for a
consideration of business and personal objectives and relational issues
that both underpin and transcend “mere” legal or factual disputes.
Within and beyond the realm of arbitration, parties have a variety of
process choices that serve various goals and priorities—subjects that
should be addressed in advance by lawyer and client. Failure to allow
the client the opportunity to consider these factors is a breach of ethi-
cal duty.69

67. Thomas J. Stipanowich, Vanishing Trial, supra note 18, at 893 n.195 (quoting CPR Com-
mission member Harold Hestnes).
68. The Model Rules provide:
In representing a client, a lawyer shall exercise independent professional judgment and
render candid advice. In rendering advice, a lawyer may refer not only to law but to
other considerations such as moral, economic, social and political factors, that may be
relevant to the client’s situation.
MODEL RULES, supra note 37, at R. 2.1.
Comment 5 to Model Rule 2.1 provides:
[W]hen a lawyer knows that a client proposes a course of action that is likely to result
in substantial adverse legal consequences to the client, the lawyer’s duty to the client
under Rule 1.4 may require that the lawyer offer advice if the client’s course of action is
related to the representation. Similarly, when a matter is likely to involve litigation, it
may be necessary under Rule 1.4 to inform the client of forms of dispute resolution that
might constitute reasonable alternatives to litigation.
MODEL RULES, supra note 37, at R. 2.1. cmt.
69. See generally Robert F. Cochran, Professional Rules and ADR: Control of Alternative Dis-
pute Resolution under the ABA Ethics 2000 Commission Proposal and Other Professional Re-
sponsibility Standards, 28 FORDHAM URB. L .J. 895, 898-901 (2001). In the absence of contractual
agreements for managing disputes, it is increasingly likely that parties will end up in some form

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418 DEPAUL BUSINESS & COMMERCIAL LAW JOURNAL [Vol. 7:401

III. FIRST PRINCIPLES: A PROTOCOL FOR ARBITRATION

REFORM THROUGH CHOICE
Business users perceive a gap between expectation and experience
in arbitration. In particular, because practice under prevailing general
commercial arbitration procedures has become much more “court-
like,”70 some business users complain about high costs and delays. For
this and other reasons, users would be better off if they made better
choices—and especially by more effectively tailoring arbitration to
their own goals and priorities—at the outset, when the template for
dispute resolution is usually established. While this path is strewn with
a number of daunting practical obstacles, there are also strong busi-
ness, legal, and ethical imperatives for pursuing it. The challenge is to
encourage and facilitate more affirmative, beneficial choice-making
by business users in a pragmatic and realistic way. The following Pro-
tocol is a first effort in that direction. Due to space limitations, the
following discussion is aimed primarily at addressing concerns about
the loss of economy and efficiency in arbitration.71

A. Move Beyond “One-Size-Fits-All Arbitration” to

Fit Process to Priorities
1. Identifying client goals and priorities
Experts in the development of integrated programs for managing
and resolving conflict maintain that organizations should begin efforts
to manage conflict by articulating the goals the program will serve.72
This approach underpins leading corporate employment programs.73
As discussed above, however, such thinking is not often carried over

of court-connected mediation or ADR process. In such cases key decisions about the scope and
shape of the process may be out of the parties’ hands.
70. Benjamin J.C. Wolf, On-line But Out of Touch: Analyzing International Dispute Resolu-
tion Through the Lens of the Internet, 14 CARDOZO J. INT’L & COMP. L. 281, 306-07 (2006)
(describing the disadvantages of arbitration to include costs similar to litigation and lengthy dis-
covery process and hearings); see also Elena V. Helmer, International Commercial Arbitration:
Americanized, “Civilized,” or Harmonized? 19 OHIO ST. J. ON DISP. RESOL. 35 (2003) (discuss-
ing perceptions of the American influence on international arbitration); Amr A. Shalakany, Ar-
bitration and the Third Work: A Plea for Reassessing Bias Under the Specter of Neoliberalism, 41
HARV. INT’L L. J. 419, 434-435 (2000) (observing that international arbitration is no longer
quicker than adjudication; suggesting that “American law model” is a cause).
71. A more extensive protocol would include guideposts and detailed discussion of third party
discovery, multi-party practice, the protection of confidentiality, and other topics that would
require many more pages than are available here. Some of these subjects are alluded to briefly in
the text accompanying notes 75-79 infra.
72. See, e.g., CATHY A. COSTANTINO & CHRISTINA S. MERCHANT, DESIGNING CONFLICT
MANAGEMENT SYSTEMS: A GUIDE TO CREATING PRODUCTIVE AND HEALTHY ORGANIZATIONS
168-71 (1996).
73. Id.

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into the management of commercial disputes. In that arena, dispute

resolution is typically given short shrift, and gaps are filled by incorpo-
rating the standard arbitration procedures of leading provider
institutions.
Although prevailing commercial arbitration procedures are usually
the product of considerable thought and discussion by very bright, ex-
perienced, and thoughtful people (including leading lawyers and, in
some organizations, non-lawyers), no single set of commercial arbitra-
tion procedures can effectuate all of the goals that are important to
business users in different kinds of cases. Consider the following list of
ends that may be sought by businesses in dispute resolution: low cost
or cost efficiencies; a speedy outcome or the avoidance of undue de-
lay; the ability to choose decision makers; court-like due process or
results comporting with legal standards; application of pertinent com-
mercial, technical or professional standards; a final and binding reso-
lution; predictability; limited risks; consistency of outcomes; privacy;
confidentiality; and preservation of a relationship or continuing per-
formance. In addition, the ability to exert control over the process and
the flexibility to address different circumstances is important.
As previously discussed, “one-size-fits-all” arbitration rules are (of
necessity) designed to accommodate a wide range of possible circum-
stances, and therefore afford arbitrators and parties a considerable de-
gree of “wiggle room.” Advocates and arbitrators determine the
shape and pace of the process, the degree of protection to be afforded
sensitive information, and other specific contours of arbitration. This
approach necessarily heightens uncertainties and enhances the risk
that particular user goals may be frustrated. It often, moreover, results
in an experience that closely resembles litigation.74
A recent final report on litigation reform recognizes that the “one-
size–fits-all” approach embodied in federal and state court procedures
has contributed significantly to costs and delays, and says “rulemakers
should have the flexibility to create different sets of rules for certain
types of cases so [the cases] can be resolved more expeditiously and
efficiently.”75 If trial lawyers recognize the need for new models of
court trial to promote economy and efficiency, why are business users
not taking advantage of the choice inherent in arbitration to adopt
streamlined procedures?
To exert greater control over their destiny in arbitration, business
clients and counsel need to recognize and address critical “forks in the

74. See supra Part II.B.

75. FINAL REPORT ON LITIGATION REFORM, supra note 7, at 4.

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420 DEPAUL BUSINESS & COMMERCIAL LAW JOURNAL [Vol. 7:401

road” through clear process choices. For example, in making choices

about arbitration, users might ask themselves at least a few key
questions:
• Is low cost and a speedy outcome more important than court-
like due process, justifying expedited, or streamlined procedures
in certain categories of cases?76
• Is it possible to generally limit arbitration-related discovery?
Can we set narrow bounds for discovery in certain types of
cases?77
• Is an arbitrator other than a legal professional more appropriate
in certain kinds of disputes?
• If there is a serious concern about the impact of a final award
and the absence of judicial scrutiny, what are the most cost-ef-
fective and beneficial ways of addressing the concern?78
• Is there a need to ensure that three or more parties are included
in (and bound by) the results of the dispute resolution process,
and will special provisions need to be made for consolidated ar-
bitration or joinder of parties?
• Are certain categories of proprietary information likely to be
relevant to disputes under the contract? If so, what confidential-
ity protections should be included in the initial dispute resolu-
tion clause?79
• If preservation of a relationship or maintenance of contract per-
formance is a priority, how should the arbitration process be tai-
lored to reflect that concern?80
Questions such as these (several of which will be discussed at greater
length below) are critical to translating client priorities into effective
approaches to conflict. Planners without dispute resolution experience
should draw upon more knowledgeable colleagues or outside counsel
with broad conflict management experience.

2. Considering arbitration as part of a systematic

approach to conflict management
A number of companies have embraced systematic approaches to
handling conflict. They have articulated business goals to be achieved
in their program, developed effective mechanisms for the early assess-
ment and affirmative management of conflict,81 and promoted various

76. See infra Part III.B.

77. See infra Part III.C.
78. See infra Part III.D.
79. See infra text accompanying notes 193-200 (briefly discussing confidentiality concerns and
potential need for affirmative protection of sensitive information in arbitration).
80. See, e.g., infra text accompanying notes 81-92 (discussing Abbott Labs procedure for dis-
tribution contracts).
81. See Stipanowich, Vanishing Trial, supra note 18, at 883-93 (discussing sophisticated corpo-
rate conflict management programs).

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2009] ARBITRATION AND CHOICE 421

appropriate dispute resolution tools (including negotiation, mediation,

and arbitration).82 Approached in this way, as part of a thoughtful and
multi-faceted approach to resolving conflict, binding arbitration is
more likely to prove its particular value as a response to business
needs and priorities.

3. Custom-tailoring arbitration
a. customization at the contract level

In order to ensure that arbitration is most effectively employed as

part of a systematic approach to conflict, counselors should take time
to consider what kind of arbitration procedure will best serve the
goals of a client. The result may be the adoption or adaptation of stan-
dard arbitration and dispute resolution procedures (including national
models published by JAMS, CPR, or AAA). Some businesses, how-
ever, may find it worthwhile to develop their own “dedicated” dispute
resolution models. This latter approach is cost-effective in the context
of a high-stakes commercial relationship, a repeatedly used contract
template, or a stream of prospective disputes.
A form of expedited arbitration83 emphasizing speed and certainty
for the resolution of disputes arising under long-term distributorship
contracts was pioneered by Abbott Labs, a Chicago-based corpora-
tion. The mechanism was embodied in an “Alternative Dispute Reso-
lution” program, a stepped program analogous to those featured in
many other business contracts.84 However, for the Abbott business
clients, the critical goals and expectations were speed, certainty, and
the maintenance of continuing business relationships. It was essential
for the parties to have guidance respecting the basis of their ongoing
relationship under the distributorship contract, and they needed a de-
cision “sooner rather than later.” Abbott planners concluded that sub-
stantial time could be saved by eliminating discovery, since, as one of
the program architects observed, “ninety-nine percent of the time you
will not find something as a result of time-consuming and expensive

82. See id. at 884. See also Stipanowich, New Litigation, supra note 1, at Part II.E. (discussing
the “movement upstream” in corporate conflict management). By way of comparison, the Final
Report on Litigation Reform calls to courts to “raise the possibility of mediation or other forms
of alternative dispute resolution early in appropriate cases,” including mediation of individual
issues FINAL REPORT ON LITIGATION REFORM, supra note 7, at 21.
83. The “ADR” procedure nowhere specifically identifies the adjudicative process as “arbitra-
tion,” but the latter fulfills all the requisites of “classic” binding arbitration. See Stipanowich,
Arbitration Penumbra, supra note 49, at 435-36.
84. Abbott Labs, Dispute Resolution Program [hereinafter Abbott Program] (on file with
author).

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discovery—a real waste.”85 Therefore, the Abbott model was aimed at

“thin-slicing”86 by limiting adjudication largely to the information at
hand. As such, the procedure was a dramatic departure from the in-
stinct of many advocates in the professional legal culture who seek
“perfect information” before deciding how to dispose of the case. The
Abbott program is characterized by (a) a very short period before ar-
bitration hearings, (b) a prohibition on discovery, (c) a requirement
that each party have no more than five hours to present its case in the
arbitration hearing, and (d) a baseball arbitration-type format in
which the arbitrator’s award must be based upon the proposal of one
or the other of the disputants.87
Following the submission of written notice of a dispute, the Abbott
procedure requires “good faith negotiations” between the “presidents
(or their designees) of the affected subsidiaries, divisions, or business
units” within twenty-eight days. Failing resolution through negotiation
(including the failure of the principals to negotiate), the procedure
calls for the appointment of a neutral “to preside in the resolution of
disputes.”88 Between twenty-eight and fifty-six days after selection,
the neutral must “hold a hearing to resolve each of the issues identi-
fied.”89 The parties then submit lists of exhibits and witnesses, a pro-
posed ruling on each issue to be resolved, and a brief of no more than
twenty pages in support of their proposals. No discovery is “required
or permitted by any means.”90 The hearing is to be “conducted on two
consecutive days,” with five hours allotted to each party for presenta-
tion. The award must be published within fourteen days after comple-
tion of the hearing, and must “adopt in its entirety the proposed ruling

85. Lara Levitan, Senior Counsel, Abbott Labs, Presentation at the CPR Institute for Dispute
Resolution Annual Meeting: Corporate Counsel Roundtable on Commercial Arbitration (Jan.
2005) (notes on file with author). See also Russ Bleemer, High Quality Results, High Quality
Processes: Top In-House Counsel Discuss the Continuing Challenges In Commercial Arbitration,
24 ALTERNATIVES TO THE HIGH COST OF LITIG. 182 (2006) (discussing the roundtable).
86. Bleemer, supra note 85, at 183.
87. In other words, the arbitrator must choose the more “just” proposal and incorporate it in
his or her decision, which will be legally binding.
88. Bleemer, supra note 85, at 183. The neutral selection process is required to begin within 21
days of the notice of dispute, and, in the absence of mutual agreement on a neutral, is to be
conducted under the auspices of the CPR Institute for Dispute Resolution [now the Interna-
tional Institute for Dispute Resolution]. In 2007, Abbott further refined its standard provision to
keep the selection of the neutrals squarely in the hands of the parties, i.e. if the parties cannot
agree to one mutually acceptable independent, impartial and conflicts-free neutral, each party
chooses one independent, impartial and conflicts-free arbitrator and those two arbitrators
choose a third such neutral for the panel.
89. Bleemer, supra note 85, at 183.
90. Bleemer, supra note 85, at 183.

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2009] ARBITRATION AND CHOICE 423

and remedy of one of the parties on each disputed issue.”91 If all rul-
ings are in favor of the same party, the losing party must pay all fees
and expenses of the proceeding, including the reasonable legal fees of
the prevailing party.92 Although enforceable in court, the rulings of
the neutral and allocation of fees and expenses are “binding, non-re-
viewable, and non-appealable.”93
While the foregoing procedure is particularly draconian and there-
fore not a suitable template for general purposes, the process served
its particular purpose well. Although Abbott was not always success-
ful in persuading distributorship contract partners to agree to the ex-
pedited process, the program has been successfully employed in
contractual relationships.94
Several points are worth stressing about the Abbott Labs
procedure:
1) the program was narrowly tailored for a specific, common
transaction type—distributorship contracts;
2) Abbott designed the program in advance of any specific negoti-
ations with contracting partners;
3) Abbott first identified key corporate goals and priorities
(speed, economy, a quick answer, a preserved relationship),
and then tailored the process to those ends;
4) although this was a highly abbreviated process, Abbott consid-
ered and incorporated multiple dispute resolution steps; and
5) Abbott made limited use of an appropriate “provider organiza-
tion”—in this case the CPR Institute—to assist with arbitrator
selection.

b. customization by industry, trade, or professional group

Another form of customized program is that developed by and for a
specific industry, mercantile group, or professional association.95

91. Bleemer, supra note 85, at 183.

92. Bleemer, supra note 85, at 183.
93. It should be noted that there is a division of judicial opinion regarding the enforceability
of agreements to limit or avoid judicial review. Some courts have enforced such agreements. See,
e.g., Hoeft v. MVL Group, Inc., 343 F.3d 57 (2d Cir. 2003) (contractual limitation of bases for
vacatur to exclude “manifest disregard” was unenforceable; “Judicial standards of review, like
judicial precedents, are not the property of private litigants.”). Others courts have denied en-
forcement. See, e.g., Roadway Package Sys., Inc. v. Kayser, 257 F.3d 287 (3d Cir. 2001), cert.
denied, 534 U.S. 1020 (2001); Bowen v. Amoco Pipeline Co., 254 F.3d 925, 931 (10th Cir. 2001)
(noting in dicta that “parties to an arbitration agreement may eliminate judicial review by
contract”).
94. Levitan, supra note 85. (Lara Levitan, senior counsel at Abbott Laboratories, makes rec-
ommendations based on her company’s arbitration program); see also Bleemer, supra note 85.
95. See Thomas J. Stipanowich, Rethinking American Arbitration, 63 IND. L.J. 425, 431 n.24,
453-77 (1988) [hereinafter Stipanowich, Rethinking] (discussing construction industry arbitration
procedures and summarizing other studies on trade and industry arbitration programs).

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424 DEPAUL BUSINESS & COMMERCIAL LAW JOURNAL [Vol. 7:401

These programs, many of which have long historical roots, incorporate

a diverse array of arbitration processes tailored to particular kinds of
disputes. For example, in the sale of thoroughbreds, bidding disputes
might be adjudicated by the decision of an auctioneer,96 and warranty-
related controversies by a panel of veterinarians.97
The AAA Construction Rules, which were developed with input
from design and construction professionals as well as attorneys, offer
three “tiers” of procedure corresponding to the amount in contro-
versy.98 The AAA framework provides that claims of no more than
$75,000 will be addressed through Fast Track Procedures featuring a
single arbitrator, a presumption of no discovery, and tight timeta-
bles.99 At the other end of the spectrum are Rules for Large, Complex
Cases, which are triggered whenever claims exceed $500,000.100
Again, the arbitration provisions are published with mediation proce-
dures, encouraging planners and drafters to consider both
processes.101

B. Make Clear Choices Regarding Limits on

Cycle Time and Process
1. The tension between economy and other goals
The conventional expectation is that arbitration proceedings will be
conducted without unnecessary delay or expense.102 There is abiding
tension between these prospects and the expectations of “due pro-
cess”—particularly when the measuring stick for the latter is litigation.
Accommodating these competing expectations in discrete cases is per-

96. See, e.g., CANADIAN THOROUGHBRED HORSE SOCIETY (ONTARIO DIVISION), CANADIAN-
BRED YEARLING SALE (Sept. 2, 2008), http://www.cthsont.com/docs/sales/13168_YearlingSaleIn-
tro.pdf.
97. See id. By way of contrast, the Bloodstock Agent Code of Conduct Dispute Resolution
Process provides for arbitration under the rules of the American Arbitration Association. See
Sales Integrity Program, http://www.salesintegrity.org/bloodstock-agent-code-buyer.html (last
visited Apr. 27, 2009).
98. AM. ARBITRATION ASS’N CONSTR. INDUS. ARBITRATION RULES AND MEDIATION PROCE-
DURES (2007) [hereinafter AAA CONSTR. RULES], available at http://www.adr.org/sp.asp?id=
22004.
99. Id. at R. F-1-F-13.
100. Id. at R. L-1-L-4.
101. Id. at R. M-1-M-17. See Stipanowich, Cutting Edge, supra note 31, 75.
102. See Stipanowich, Rethinking, supra note 95, at 429. See also Mitsubishi Motors Corp. v.
Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 633 (1985) (“[I]t is often a judgment that stream-
lined proceedings and expeditious results will best serve their needs that causes parties to agree
to arbitrate their disputes; it is typically a desire to keep the effort and expense required to
resolve a dispute within manageable bounds that prompts them mutually to forgo access to judi-
cial remedies.”); Curtis E. von Kann, Not So Quick, Not So Cheap, 27 LEGAL TIMES 38 (2004)
(describing “rough justice” of traditional commercial arbitration).

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2009] ARBITRATION AND CHOICE 425

haps the greatest challenge for drafters of arbitration and dispute res-
olution provisions, since the balance will be struck differently
depending on the circumstances. Unless they are content to leave the
matter to the discretion and interaction of arbitrators and counsel,
however, parties desiring to promote efficiency and economy in arbi-
tration should consider including specific provisions for the purpose.

2. Expedited or streamlined rules and their key features

Mounting concerns about arbitration costs and delays have trig-
gered efforts to develop templates for expedited or “streamlined”
forms of arbitration. A forerunner of current efforts to produce
“tighter packaging and earlier resolution” was the Expedited Arbitra-
tion Procedures published as a part of the American Arbitration As-
sociation’s multi-tiered procedures for construction disputes;103
similar rules were later developed for commercial disputes.104 JAMS
now publishes Streamlined Arbitration Procedures alongside its Com-
prehensive Arbitration Procedures105 (with specialized streamlined
procedures for construction cases106). The International Institute for
Conflict Prevention & Resolution (CPR) recently published Expe-
dited Construction Arbitration Procedures107 and is developing
“Global Rules for Expedited Arbitration.”108 Although all of these
procedures place heavy emphasis on speed, they also exhibit signifi-
cant differences.

a. Scope of application
Given general concerns about procedural fairness and the strong
emphasis on court-like due process, it is hard to imagine business
users agreeing to tightly circumscribed procedures for all disputes aris-
ing under or relating to a commercial contract, regardless of size, com-
plexity and subject matter. With this in mind, the AAA Expedited

103. See AAA CONSTR. RULES, supra note 98, at R. F-1-F-13.

104. AAA COMMERCIAL RULES, supra note 35, at R. E-1-E-10.
105. JAMS STREAMLINED ARBITRATION RULES & PROCEDURES (2007) [hereinafter JAMS
STREAMLINED RULES], available at http://www.jamsadr.com/rules/streamlined.asp.
106. JAMS ENG’G & CONSTR. ARBITRATION RULES & PROCEDURES FOR EXPEDITED ARBI-
TRATION (2008) [hereinafter JAMS ENG’G/CONSTR. EXPEDITED RULES] (on file with author).
107. INT’L INST. FOR CONFLICT PREVENTION & RESOL. EXPEDITED ARBITRATION OF CONSTR.
DISPUTES (2006) [hereinafter CPR EXPEDITED ARBITRATION], available at http://www.cpradr.
org/ClausesRules/ExpeditedArbitrationofConstructionDisputes/tabid/82/Default.aspx. See also
IAMA ARBITRATION RULES INCORPORATING THE IAMA FAST TRACK ARBITRATION RULES
(2007), available at http://www.iama.org.au/pdf/IAMAAR_FastTrack07.pdf; NAI ARBITRATION
RULES § 4A (2008) (addressing “Summary Arbitral Proceedings”).
108. INT’L INST. FOR CONFLICT PREVENTION & RESOL. GLOBAL RULES FOR EXPEDITED
COMMERCIAL ARBITRATION (draft on file with author).

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Procedures are aimed at cases in which “no disclosed . . . counterclaim

exceeds $75,000.”109 The original JAMS Streamlined Arbitration
Rules and Procedures, less procedurally spare than their AAA coun-
terpart, were designed to govern arbitrations in which “no disputed
claim or counterclaim exceeds $250,000.”110
Of late, however, inventive attorneys have been contemplating
broader applications for time-bounded arbitration. English QC and
scholar John Uff opined that to avoid “the enormously wasteful and
costly process of preparing volumes of documentation” associated
with disputes under engineering and construction contracts, it would
be appropriate to “channel” controversies into narrow issues capable
of being precisely defined and resolved on the basis of limited materi-
als.111 Similar logic inspired CPR’s Expedited Construction Arbitra-
tion Procedures, which include no specific dollar limits.112 JAMS also
published expedited rules for construction disputes of general applica-
bility.113 It is too early to tell whether these models, or Uff’s concept
of “smaller claim packages, quickly adjudicated,” will be broadly em-
braced. While the concept is similar to the “dispute review board
(DRB)” mechanisms widely used on major infrastructure projects, de-
cisions by DRB panels are non-binding or only “preliminarily bind-
ing;”114 attorneys are likely to be far more wary of a short, sharp
process that produces a fully binding decision—at least where the
stakes are high.115
While many counselors will be hesitant to embrace expedited mod-
els as all-purpose arbitration rules, they may, of course, contractually
limit their application to claims or disputes below a certain dollar fig-

109. See AAA COMMERCIAL RULES, supra note 35, at R. R-1(b).

110. See JAMS STREAMLINED RULES, supra note 105, at R. 1.
111. John Uff, Are We All in the Wrong Job?: Reflections on Construction Dispute Resolution,
SOC’Y OF CONSTRUCTION L. PAPERS, July 2001, at 7.
112. See CPR EXPEDITED ARBITRATION, supra note 107.
113. See JAMS ENG’G/CONSTR. EXPEDITED RULES, supra note 106.
114. The CPR procedures specifically state that they were “propelled” by “[t]he United King-
dom’s speedier construction adjudication process.” CPR EXPEDITED ARBITRATION, supra note
107. This statutorily-mandated procedure for resolving payment disputes on construction
projects in the UK has dramatically affected the landscape of construction dispute resolution.
Importantly, however, adjudicated results are not permanently binding unless the parties fail
later to arbitrate or adjudicate the dispute. See Stipanowich, New Litigation, supra note 1, at Part
II.D.
115. In light of such concerns it should be noted that the drafters of the CPR procedures
included a specific reference to the possibility of a “second look” in the form of CPR’s private
Arbitration Appeal Procedure. See CPR EXPEDITED ARBITRATION, supra note 107. The JAMS
Engineering/Construction Expedited Rules also make reference to the option of using that or-
ganization’s appeal procedure. See JAMS ENG’G/CONSTR. EXPEDITED RULES, supra note 106, R.
34. The subject of appellate arbitration is discussed below. See infra text accompanying notes
226-30.

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ure or to specific categories. Claims or disputes not covered by the

expedited or streamlined procedures could be addressed by “regular”
arbitration rules. In such cases, a drafter using the CPR or JAMS
models must produce a customized clause incorporating multiple sets
of rules.

b. Time limits
All expedited or streamlined rules are distinguished by fixed or pre-
sumptive time limits, although these time limits vary considerably in
detail. The AAA Expedited Procedures, aimed at small-dollar claims,
contemplate the shortest cycle time, with an anticipated time horizon
of around sixty days.116 CPR’s procedures embody a conceptual hun-
dred-day time frame, including a maximum of sixty days to the hear-
ing, thirty days for hearings, and ten days for deliberation and
preparation of an award.117 (Importantly, the hundred-day period
does not begin until the date set by the arbitrators at an initial pre-
hearing conference; thus, it does not include critical early procedures
governing the selection of arbitrators and detailed statements submit-
ted by both parties.)118 JAMS’s models also include shortened proce-
dural stages.119
An agreement to time limits, standing alone, is obviously insuffi-
cient; drafters must incorporate specific process elements facilitating a
shorter arbitration. These elements include arbitrator selection proce-
dures, early sharing of detailed information, tightly bounded discov-
ery, and (possibly) limitations on the final award.

c. Number of arbitrators, appointment process

Using a single arbitrator instead of a panel is an obvious choice for
those seeking economy and efficiency; it simplifies every stage of arbi-
tration, from appointment to award-writing. Thus, some expedited
procedures assume a single arbitrator will be appointed unless the
parties agree otherwise.120

116. The hearing is “to be scheduled to take place within 30 days of confirmation of the arbi-
trator’s appointment.” AAA COMMERCIAL RULES, supra note 35, at R. E-7. Awards are to be
rendered within 14 days of the close of hearing. Id. at R. E-9. In the absence of a showing of
good cause, the hearing itself is limited to a day. Id. at R. E-8(a). Cf. AAA CONSTR. RULES,
supra note 102.
117. CPR EXPEDITED ARBITRATION, supra note 107, R. 1.3.
118. See id. at R. 3, 5, 9.3.
119. See, e.g., infra text accompanying note 164 (comparing rules).
120. See, e.g., AAA COMMERCIAL RULES, supra note 35, at R. E-4; JAMS STREAMLINED
RULES, supra note 105, at R. 12(a). But see CPR EXPEDITED ARBITRATION, supra note 107, at R.
5.1 (providing for three neutral arbitrators).

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While employing a multi-member tribunal may make some lawyers

more sanguine about streamlined arbitration of larger claims, it in-
creases costs and the likelihood of delay. If drafters are truly serious
about maintaining timelines, they should require each tribunal ap-
pointee to expressly represent to the parties that he or she has the
time available to achieve an expedited timetable.121

d. Getting detailed information up front

One significant insight emerging from the development of stream-

lined rules is the critical importance of requiring parties to furnish de-
tailed information regarding claims and defenses at the front end of
the process. By way of illustration, the JAMS expedited construction
model calls for claimants to file a
Submission of Claim . . . including a detailed statement of . . . claim
including all material facts to be proved, the legal authority relied
upon . . . , copies of all documents that Claimant intends to rely
upon in the arbitration and names of all witnesses and experts
Claimant intends to present at the Hearing.122
Respondents are then required to prepare a Submission of Response
of similar substance and form within twenty days of service of the
Submission, and so forth.123 These requirements represent a dramatic
departure from the current norm in arbitration practice and demand
significant adjustment in the expectations of advocates. However,
these requirements are a critical element of any efficient process, as
recognized by the new Final Report on Litigation Reform, which con-
cludes that the failure to effectively identify issues early-on “often
leads to a lack of focus in discovery.”124
Of course, the onus of these rules is likely to fall disproportionately
on respondents since claimants will have the opportunity to make
preparations in advance of making an initial demand. For this reason,
current procedures emphasize arbitrator discretion to give respon-

121. See, e.g., CPR EXPEDITED ARBITRATION, supra note 107, R. 7.2. It makes sense to obtain
such a commitment from a sole arbitrator as well.
122. JAMS ENG’G/CONSTR. EXPEDITED RULES, supra note 106, at R. 9. See also CPR EXPE-
DITED ARBITRATION, supra note 107, at R. 3.4 (“Statement of Claim” is to include a detailed
statement of all facts to be proved, legal authorities relied upon, copies of all documents Claim-
ant intends to rely on, and names, CV and summary opinion testimonies of expert witnesses
Claimant intends to present.).
123. CPR EXPEDITED ARBITRATION, supra note 107, at R. 3.4.
124. FINAL REPORT ON LITIGATION REFORM, supra note 7, at 2. The Report calls for notice
pleading to “be replaced by fact-based pleading . . . [that sets] forth with particularity all of the
material facts that are known to the pleading party to establish the pleading party’s claims or
affirmative defenses.” Id. at 5.

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2009] ARBITRATION AND CHOICE 429

dents reasonable time extensions.125 Moreover, where arbitration is

preceded by negotiation or mediation, both parties will be on notice
that claims will likely be brought to arbitration.
In expedited processes, the pre-hearing conference assumes special
significance as a tool for process planning and guidance.126 Arbitrators
may also find it necessary or appropriate to conduct frequent tele-
phonic status meetings to ensure proper progress toward meeting
deadlines.

e. Limiting discovery

Effective limitations on discovery are another critical element of

any streamlined process. The most draconian approach is reflected in
the absolute prohibition on discovery employed in the Abbott Labs
procedures.127 Most drafters would want to leave the door to discov-
ery at least slightly ajar; thus, the AAA Construction Industry Fast-
Track Rules aimed at smaller dollar claims, contemplate no discovery
beyond exhibits to be used at the arbitration hearing “except . . . as
ordered by the arbitrator in extraordinary cases when the demands of
justice require it.”128 Other rules tend to be less restrictive, relying
primarily on admonitory language intended to guide parties and limit
arbitral discretion. The JAMS Engineering & Construction Expedited
Rules, for example, call for the “voluntary and informal” exchange of
all relevant, non-privileged documents and other information, but ad-
monish parties to limit requests to “material issues in dispute” and to
make such requests “as narrow as reasonably possible.” Depositions
are not permissible “except upon a showing of exceptional need” and
with arbitrator approval. Electronic data may be furnished in the form
most convenient for the producing party, and broad requests for email
discovery are not permitted.129 The subject of discovery is treated
more extensively in Section II.C.

125. See, e.g., CPR EXPEDITED ARBITRATION, supra note 107, at R. 3.6 (permitting the Tribu-
nal to extend the time for the Respondent to deliver its Statement of Defense); id. at R. 11(e)
(permitting Arbitrator to extend deadlines).
126. See CPR EXPEDITED ARBITRATION, supra note 107, at R. 9. A pre-hearing conference
held before the arbitration may be necessary to deal with difficult preliminary issues, such as
specifying issues to be resolved or stipulating uncontested facts. Joseph L. Daly, Arbitration: The
Basics, 5 J. OF AM. ARB. 1, 40 (2006); COMMERCIAL ARBITRATION AT ITS BEST, supra note 21, at
176-78.
127. See supra text accompanying note 89.
128. See AAA COMMERCIAL RULES, supra note 35, at R. F-7.
129. JAMS ENG’G/CONSTR. EXPEDITED RULES, supra note 106, at R. 17. Cf. CPR EXPEDITED
ARBITRATION, supra note 107, at R. 11.

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f. Limits on awards

Another method for facilitating streamlined arbitration is to limit

the scope of arbitral discretion in award-making. The Abbott Labs
procedure required arbitrators to choose “the proposed ruling and
remedy of one of the parties on each disputed issue,” a creative “ei-
ther/or” variant on traditional “baseball arbitration.”130 Parties might
also consider precluding arbitrators from granting certain kinds of
remedies, such as punitive damages.131 Yet another possibility is the
use of upper and lower limits on awards of monetary damages, al-
though few parties would resort to this option except in the wake of
negotiation.132

3. Other considerations for more efficient arbitration

a. Provisions for dispositive motions

The use of dispositive motions in arbitration—now contemplated

even by some expedited rules133—is, practically speaking, a double-
edged sword.134 This import from the court system, prudently em-
ployed, is a potentially critical tool for narrowing arbitral issues prior
to hearings and full-blown discovery, thus avoiding unnecessary prep-
aration and hearing time. The problem is that, as in court, motion
practice often contributes significantly to arbitration cost and cycle
time without clear benefits. Filing of motions often leads to the estab-
lishment of schedules for briefing and arguments entailing considera-
ble effort by advocates, only to have arbitrators postpone decisions on

130. See DRAFTER’S DESKBOOK, supra note 30, at 43; JAMS Arbitration Defined, available at
http://www.jamsadr.com/arbitration/defined.asp (for additional discussion on either/or
arbitration).
131. COMMERCIAL ARBITRATION AT ITS BEST, supra note 21, at 53-55, 272-73 (noting that an
exclusion of punitive damages from arbitration does not necessarily amount to a waiver of the
right to bring punitives in court); Charles Smith, The Application of Due Process to Arbitration
Awards of Punitive Damages – Where is the State Action? 2007 J. DISP. RESOL. 417, 437 (2007).
132. COMMERCIAL ARBITRATION AT ITS BEST, supra note 21, at 53-55. There is also the possi-
bility of tying limits on arbitral award-making authority to trial de novo, as illustrated by con-
sumer dispute resolution programs under state lemon laws. See, e.g., WASH. REV. CODE
§ 19.118.100 (2009). It is doubtful, however, that business clients would see a benefit in preserv-
ing the option of court trial for the resolution of disputes involving commercial contracts. The
subject of contractual provisions for judicial review of awards on the merits is addressed in a
later section. See infra Part II.D.
133. See, e.g., JAMS ENG’G/CONSTR. EXPEDITED RULES, supra note 106, at R. 18.
134. COMMERCIAL ARBITRATION AT ITS BEST, supra note 21, at 203-06; Zela G. Claiborne,
Constructing a Fair, Efficient, and Cost-Effective Arbitration, 26 ALTERNATIVES TO THE HIGH
COST OF LITIG. 186 (2008). See also Albert G. Ferris & W. Lee Biddle, The Use of Dispositive
Motions in Arbitration, 62 DISP. RESOL. J. 17 (2007).

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the motions until the close of hearings.135 While arbitrators are prop-
erly chary of summarily disposing of matters implicating factual issues,
certain matters (such as contractual limitations on damages, statutory
remedies, or statutes of limitations and other legal limitations on
causes of action) may be forthrightly addressed early on with little or
no discovery.136 If dispositive action is foreseen as a useful element in
arbitration, an appropriate provision should be included in the arbi-
tration procedure.137
At the time of appointment, moreover, parties should assess
whether potential arbitrators are temperamentally and philosophically
capable of rendering dispositive awards. Indeed, some leading arbitra-
tors insist that motions should be addressed directly and energetically,
since a prompt telephonic discussion may avoid the need for extensive
briefing.138

b. Other elements
Recent guideposts for arbitrators and advocates suggest other ways
of achieving economy and efficiency in arbitration.139 These include
the use of electronic document management and retrieval options;140
employing witness statements in lieu of direct testimony;141 joint ex-
amination of expert witnesses;142 chess clocks;143 and “virtual” hear-

135. For a discussion of deposition handling in arbitrations, see Romaine L. Gardner, Deposi-
tions in Arbitration: Thinking the Unthinkable, 1131 PRACTISING LAW INST. CORP. LAW & PRAC.
COURSE HANDBOOK 379, 389-97 (1999).
136. COMMERCIAL ARBITRATION AT ITS BEST, supra note 21, at 48, 53-55. The new Final
Report on Litigation Reform states that “parties and the courts should give greater priority to
the resolution of motions that will advance the case more quickly to trial or resolution.” FINAL
REPORT ON LITIGATION REFORM, supra note 7, at 22. It also calls for a “new summary proce-
dure . . . by which parties can submit applications for [the] determination of enumerated matters
(such as rights that are dependent on the interpretation of a contract) on pleadings and affidavits
or other evidentiary materials.” Id. at 6.
137. See, e.g., JAMS RULES, supra note 35, at R. 18.
138. See Louis L. C. Chang, Keeping Arbitration Easy, Efficient, Economical and User
Friendly, 61 DISP. RESOL. J. 15, 16 (2006).
139. Id. See also Claiborne, supra note 134. See generally THE COLLEGE OF COMMERCIAL
ARBITRATORS: GUIDE TO THE BEST PRACTICES IN COMMERCIAL ARBITRATION (Curtis E. von
Kann, ed.) (2006) [hereinafter CCA GUIDE TO BEST PRACTICES].
140. See William A. Tanenbaum, Arbitration of Outsourcing, IP and Technology Disputes, 914
PRACTISING LAW INST. PATENTS, COPYRIGHTS, TRADEMARKS AND LITERARY PROP. COURSE
HANDBOOK SERIES 11 (2007) (discussing what to include in the arbitration clause when elec-
tronic documents are likely to be involved in a dispute).
141. See James J. Myers, 10 Techniques for Managing Arbitration Hearings, 51 DISP. RESOL. J.
28 (1996); Ariana R. Levinson, Lawyering Skills, Principles and Methods Offer Insight as to Best
Practices for Arbitration, 60 BAYLOR L. REV. 1 (2008).
142. See Terry F. Peppard, New International Evidence Rules Advance Arbitration Process, 73
WIS. LAWYER 18, 21 (2000) (“[joint examination] allows the arbitrators to make instant compari-
sons of contending views [and] encourages the witnesses to explain themselves to their collegial

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ings.144 If legally permissible, limited judicial review of arbitration

awards may also be appropriate.145
As discussed below, the best-drafted procedures may fail to pro-
duce desired results with arbitrators who are not good process manag-
ers.146 Similarly, if an outside advocate is employed, the client (or in-
house counsel) needs to be present at key decision points to ensure
the client’s goals are furthered.147

C. Make Clear Choices Regarding Discovery

No aspect of modern commercial arbitration is more redolent of
litigation than discovery practice, and no element of arbitration prac-
tice more neatly embodies the fundamental tension between economy
and due process. Legal counselors should be aware, however, that the
old “no discovery in arbitration” maxim is generally inaccurate and
some amount of discovery usually takes place under standard arbitra-
tion rules. In the absence of agreement, considerable discretion may
be reposed in arbitrators respecting discovery issues.148 Given the
costs and potential delays associated with discovery, counsel should
consider specific procedural options during the drafting process.
In litigation, parties have broad rights to discover any evidence that
may be reasonably calculated to lead to the discovery of admissible
evidence regardless of the actual materiality or relevance of that evi-
dence to the outcome of the case.149 This approach, coupled with lack

peers and to make concessions of uncontested matters, thus . . . sharpen[ing] the issues to be
decided.”).
143. Chang, supra note 138, at 20.
144. For a discussion of the cost of face-to-face hearings in online arbitration, see Nicolas de
Witt, Online International Arbitration: Nine Issues Crucial to Its Success, 12 AM. REV. OF INT’L
ARB. 441, 456-58 (2001). See also ADR News, AAA Establishes E-Commerce Panel, Forms E-
Commerce Strategic Alliance, 57 DISP. RESOL. J. 5 (2002) (electronic documents-only, telephonic
and in-person arbitrations).
145. For a detailed, practical discussion of judicial review and arbitration, see notes and cases
in COMMERCIAL ARBITRATION AT ITS BEST, supra note 21, at 269-304.
146. Id.
147. See Kevin R. Casey & Marissa Parker, Strategies for Achieving an Arbitration Advantage
Require Early Analysis, Pre-Hearing Strategies, and Awards Scrutiny, 26 ALTERNATIVES TO THE
HIGH COST OF LITIG. 167 (2008) (discussing steps advocates and clients can take to achieve
client goals in arbitration).
148. For example, CPR Rule 11 provides:
The Tribunal may require and facilitate such disclosure as it shall determine is appropri-
ate in the circumstances, taking into account the needs of the parties and the desirabil-
ity of making discovery expeditious and cost-effective. The Tribunal may issue orders to
protect the confidentiality of proprietary information, trade secrets and other informa-
tion disclosed [in discovery].
CPR RULES, supra note 35, at R. 11.
149. The Federal Rules of Civil Procedure, for example, state:

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of focus at the outset of discovery, mean that “discovery can cost far
too much and can become an end in itself.”150 Thus, the recent Final
Report on Litigation Reform calls for dramatic overhauling of the
court discovery process based on the “principle of proportionality.”151
Parties choosing to arbitrate presumably do so with the expectation
of attenuated discovery. As observed in the Commentary to the CPR
Rules,
Arbitration is not for the litigator who will ‘leave no stone un-
turned.’ Unlimited discovery is incompatible with the goals of effi-
ciency and economy. The Federal Rules of Civil Procedure are not
applicable. Discovery should be limited to those items [for] which a
party has a substantial, demonstrable need.152
Yet such admonitions, relegated to commentary, may not be enough
to persuade arbitrators to rigorously supervise and limit discovery. In
cases of any size or complexity, cogent arguments may be framed in
support of document discovery and for many depositions.153 If docu-
ments are not exchanged and major witnesses are not deposed, parties
will argue that it will be necessary to devote considerably more time
to cross examination during the arbitration hearing. The danger of
surprise should also be considered: if a witness’s testimony produces
new information, there is a possibility that the hearing will have to be
adjourned pending further investigation and information exchange.154
Moreover, since arbitrators are subject to vacatur for refusal to admit
relevant and material evidence,155 some may draw the inference—not
established by law—that a failure to grant court-like discovery is an
inherent ground for vacatur.156 While parties (including those who re-
gard depositions as wholly inimical to the arbitration process and
therefore inappropriate absent specific agreement)157 may draw firm

Parties may obtain discovery regarding any nonprivileged matter that is relevant to [the
claim or defense of any party] relevant information need not be admissible at the trial if
the discovery appears reasonably calculated to lead to the discovery of admissible
evidence.
FED. R. CIV. P. 26(b)(1). See Stipanowich, New Litigation, supra note 1, at Part I.B.
150. FINAL REPORT ON LITIGATION REFORM, supra note 7, at 2.
151. Id. at 7-16.
152. CPR RULES, supra note 35, at R. 11 cmt., available at http://www.cpradr.org/Clauses
Rules/2007CPRRulesforNonAdministeredArbitration/tabid/125/Default.aspx#Commentary.
153. Stipanowich, New Litigation, supra note 1, at Part I.B.2.a.
154. Stipanowich, Rethinking, supra note 95, at 444.
155. 9 U.S.C. § 10(a) (2000).
156. Letter from Curtis E. von Kann, Co-Chair, College of Commercial Arbitrators Summit
on the Future of Arbitration (Oct. 2008) (on file with author).
157. See, e.g, Email from Joseph T. McLaughlin, Arbitrator and Former Partner, Heller Ehr-
man LLP (June 18, 2008) (on file with author); Revised Draft CPR Guidelines (June 19, 2008)
(on file with author) (“Depositions are an integral part of the litigation process in the United
States which the parties who have chosen arbitration have rejected.”).

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lines, the response will vary with the arbitrator. Arbitrators may be
especially reluctant to draw lines in the face of a broad litigation-style
discovery plan embraced by counsel for both parties.158 Because arbi-
tration is ultimately a consensual process, even arbitrators who sus-
pect that business parties would have preferred a more attenuated
process will tend to bow to a mutual agreement of the parties’ counsel
in the absence of (1) clear guidance regarding the parties’ intent to
circumscribe discovery, and (2) clear arbitral authority to modify the
agreement of counsel regarding discovery.159
Parties desiring different or more explicit guidelines for information
exchange and discovery in arbitration, including those who are con-
cerned about the impact of discovery on the cost and duration of arbi-
tration, now have a variety of templates to consider.

1. Making discrete choices

As discussed above in connection with expedited hearings, sponsors

of leading arbitration procedures have begun to incorporate specific
provisions setting clear limits on discovery or establishing standards to
guide arbitral discretion in addressing discovery disputes.160 Other
general guidelines on discovery are also emerging.
The CPR Protocol on Disclosure of Documents and Presentation of
Witnesses in Commercial Arbitration is an effort to offer counselors
and drafters clear choices regarding information exchange and discov-
ery.161 It gives parties the opportunity to select among several alterna-
tive standards regarding pre-hearing exchange of documents and
witness information. Counsel for parties to domestic commercial arbi-
tration agreements may also wish to consult and consider incorporat-
ing elements of other standards, including the IBA Rules on the

158. The CPR Commentary encourages parties’ counsel “to agree, preferably before the ini-
tial pre-hearing conference, on a discovery plan and schedule and to submit the same to the
Tribunal for its approval.” CPR RULES, supra note 35, at R. 11 cmt.
159. Where there are concerns that parties may be ill-served by a discovery plan, an arbitra-
tion tribunal might require principals or house counsel to participate in the preliminary hear-
ing(s) at which the discovery plan is discussed, and to sign-off on the discovery plan. The author
is aware of this practice by some arbitrators.
160. See supra text accompanying notes 127-29.
161. See INT’L INST. FOR CONFLICT PREVENTION & RESOL. CPR PROTOCOL ON DISCLOSURE
OF DOCUMENTS AND PRESENTATION OF WITNESSES IN COMMERCIAL ARBITRATION, Preamble
(2008), available at http://www.cpradr.org/ClausesRules/CPRProtocolonDisclosure/tabid/393/
Default.aspx [hereainafter CPR PROTOCOL] (designed in part “to afford to parties to an arbitra-
tion agreement the opportunity to adopt certain modes of dealing with pre-hearing disclosures of
documents and with the presentation of witnesses, pursuant to Schedules.”).

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Taking of Evidence in International Commercial Arbitration162 or the

ICDR Guidelines for Arbitrators Concerning Exchanges of Informa-
tion.163 Both standards were designed for proceedings involving par-
ties and practitioners from civil law countries and sovereign states
applying common law.
In addition, emerging standards may enhance the ability of arbitra-
tors to effectively address information exchange issues by encouraging
the explicit weighing of burdens and benefits. Emerging standards
may also offer arbitrators other tools, including explicit authority to
condition production on the payment by the requesting party of asso-
ciated reasonable costs.164 These templates may be employed in vari-
ous ways.

2. Document exchange and discovery

Standard procedures often provide for some exchange of docu-
ments, at least to the extent they are non-privileged and relevant to
the dispute.165 In some cases, such production occurs within a fairly
short timeframe.166 Some parties, however, may want to narrow (or
expand) this framework or establish more specific standards for docu-
ment exchange.
A straightforward template for limited information exchange/dis-
covery is found in the leading international standard on the subject,
the IBA Rules on the Taking of Evidence in International Commer-
cial Arbitration.167 This standard, a compromise in which U.S.-style

162. See INT’L BAR ASS’N IBA RULES ON THE TAKING OF EVIDENCE IN INT’L COMMERCIAL
ARBITRATION (1999), available at http://www.ibanet.org/images/downloads/IBA%20rules%20on
%20the%20taking%20of%20Evidence.pdf [hereinafter IBA RULES].
163. See INT’L CTR. FOR DISPUTE RESOL. ICDR GUIDELINES FOR ARBITRATORS CONCERN-
ING EXCHANGES OF INFO. (2008), available at http://www.adr.org/si.asp?id=5288 [hereinafter
ICDR GUIDELINES].
164. See, e.g., CPR PROTOCOL, supra note 161, § 1(e)(2). See also ICDR GUIDELINES, supra
note 163, at R. 8.a., which provides:
In resolving any dispute about pre-hearing exchanges of information, the tribunal shall
require a requesting party to justify the time and expense that its request may involve,
and may condition granting such a request on the payment of part or all of the cost by
the party seeking the information. The tribunal may also allocate the costs of providing
information among the parties, either in an interim order or in an award.
165. See, e.g., JAMS RULES, supra note 35, at R. 17(a) (providing for the parties to “cooperate
in . . . the voluntary and informal exchange of all . . . relevant, non-privileged documents, includ-
ing, but without limitation, copies of all documents in their possession or control on which they
rely in support of their positions.”).
166. The JAMS Comprehensive Rules call for document exchange “within twenty-one (21)
calendar days after all pleadings or notice of claims have been received.” JAMS RULES, supra
note 35, at R. 17(a). Under the JAMS Streamlined Arbitration Rules, this period is reduced to
14 days. JAMS STREAMLINED RULES, supra note 105, at R. 13(a).
167. See IBA Rules, supra note 162.

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discovery is tempered by the influence of prevailing practices in civil

law countries, initially requires each party only to submit “all docu-
ments available to it on which it relies.”168 It also establishes a proce-
dure for arbitral resolution of disputes over further document
production that requires parties to describe requested documents with
specificity, explain their relevance and materiality, assure the tribunal
that they do not have the documents, and make clear why they believe
the other party has possession or control of the documents.169
A further step toward variegation is the recent publication of the
CPR Protocol on Disclosure,170 which offers parties a choice of four
discrete “modes” for document disclosure. These include: (Mode A)
No disclosure save for documents to be presented at the hearing;
(Mode B) Disclosure as provided for in Mode A together with “[p]re-
hearing production only of documents essential to a matter of import
in the proceeding for which a party has demonstrated a substantial
need;” (Mode C) Disclosure provided for in Mode B together with
disclosure, prior to the hearing, “of documents relating to issues in the
case that are in the possession of persons who are noticed as witnesses
by the party requested to provide disclosure;” and (Mode D) Pre-
hearing disclosure of documents regarding non-privileged matters that
are relevant to any party’s claim or defense, subject to limitations of
reasonableness, duplication, and undue burden.171 Although the CPR
Protocol is admirable in intent, it is not an exhaustive list of creative

168. Id. at art. 3, § 1.

169. The IBA Rules call for Requests to Produce to contain
(a) (i) a description of a requested document sufficient to identify it, or (ii) a descrip-
tion in sufficient detail (including subject matter) of a narrow and specific re-
quested category of documents that are reasonably believed to exist;
(b) a description of how the documents requested are relevant and material to the
outcome of the case; and
(c) a statement that the documents requested are not in the possession, custody or
control of the requesting Party, and of the reason why that Party assumes the
documents requested to be in the possession, custody or control of the other
Party.
Id. at art. 3, § 5.
The IBA Rules appear to have influenced the recent ICDR Guidelines for Arbitrators
Concerning Exchanges of Information, which empower the arbitrators, “upon applica-
tion, [to] require one party to make available to another party documents in the party’s
possession, not otherwise available to the party seeking the documents, that are reason-
ably believed to exist and to be relevant and material to the outcome of the case. Re-
quest for documents shall contain a description of specific documents or classes of
documents, along with an explanation of their relevance and materiality to the outcome
of the case.”
ICDR GUIDELINES, supra note 163, at guideline 3(a).
170. CPR PROTOCOL, supra note 161, § 1. Cf. Lawrence W. Newman & David Zaslowsky,
Predictability in International Arbitration, 100 N.Y. L. J. 3 (2004).
171. CPR PROTOCOL, supra note 161, at sched. 1.

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approaches to discovery in arbitration. For example, some arbitrators

limit each party to a certain number of document requests, including
subparts.172

3. Limits on depositions
In the interest of economy or certainty, some parties may want to
provide that no depositions, or a limited number of depositions, will
be conducted in anticipation of arbitration.173 Such limitations may be
tempered by giving arbitrators discretion to allow depositions in ex-
ceptional circumstances where justice requires.174 A useful example of
a clear limit coupled with narrowly cabined arbitrator discretion is
contained in Rule 17 of the JAMS Comprehensive Arbitration Rules,
which permits each party to take a single deposition;
[t]he necessity of additional depositions shall be determined by the
Arbitrator based upon the reasonable need for the requested infor-
mation, the availability of other discovery options and the burden-
someness of the request on the opposing Parties and the witness.175
Another proposed response to the burgeoning discovery problem is
the adoption of the international arbitration practice of substituting
detailed sworn witness statements for direct examination.176 Such
statements, provided to all participants prior to the hearing, might
provide a rough surrogate for depositions and save hearing time. Ad-
justments to the international practice, such as abbreviated direct ex-
amination, may be necessary to provide comfort to American lawyers
and arbitrators. The new draft CPR Protocol on Disclosure offers par-
ties the choice of embracing such an approach in their arbitration
agreement, possibly in lieu of depositions.177

4. Giving arbitrators the “last word”

An issue related to limitations on depositions is the primacy of the
arbitrator’s authority respecting pre-hearing disclosure. Specifically,

172. See, e.g., Wendy Ho, Discovery in Commercial Arbitration Proceedings, Comment, 34
HOUS. L. REV. 199, 224-27 (1997).
173. The ICDR Guidelines note that “[d]epositions, . . . as developed in American court pro-
cedures, are generally not appropriate procedures for obtaining information in international ar-
bitration.” ICDR GUIDELINES, supra note 163, at guideline 6.b. A variant of this approach used
by some arbitrators is to provide each party with a maximum number of hours of depositions of
persons within the other party’s employ or control.
174. See supra note 129 (discussing discretionary authority of arbitrator under JAMS Engi-
neering/Construction Expedited Rules).
175. JAMS RULES, supra note 35, at R. 17(b).
176. The witness statement concept is embodied in the IBA Rules. IBA RULES, supra note
162, art. 4, §§ 4-9.
177. CPR PROTOCOL, supra note 161, §§ 2-3, 5, 8-9.

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parties should consider whether they wish arbitrators or counsel to

have the last word on limiting the scope of discovery. In this respect,
current standards vary. The AAA Rules for Large, Complex Cases
apparently authorize the arbitrator(s) to police party agreements and
“place such limitations on the conduct of such [agreed] discovery as
the arbitrator(s) shall deem appropriate.”178 Although both the JAMS
and CPR Rules give arbitrators considerable authority regarding ex-
change of information, neither set of procedures is explicit regarding
the authority of arbitrators to “trump” or modify agreements regard-
ing discovery.179

5. E-discovery
As one leading participant in the development of guidelines for the
management and discovery of electronic information explains,
If the law of e-discovery were allowed to develop on an ad hoc ba-
sis, one decision at a time, companies with their complex informa-
tion technology systems would be eaten alive by process costs. It is
essential to develop best practices that work in a real world.180

178. AAA COMMERCIAL RULES, supra note 35, at R. L-4(c). An even stronger statement of
the “final authority” of arbitrators regarding discovery is set forth in the ICDR Guidelines:
1.a. The tribunal shall manage the exchange of information among the parties in ad-
vance of the hearings with a view to maintaining efficiency and economy. The
tribunal and the parties should endeavor to avoid unnecessary delay and expense
while at the same time balancing the goals of avoiding surprise, promoting equal-
ity of treatment, and safeguarding each party’s opportunity to present its claims
and defenses fairly.
b. The parties may provide the tribunal with their views on the appropriate level of
information exchange for each case, but the tribunal retains final authority to ap-
ply the above standard. To the extent the Parties wish to depart from this stan-
dard, they may do so only on the basis of an express agreement in writing and in
consultation with the tribunal.
ICDR GUIDELINES, supra note 163, at guideline 1.a-b (emphasis added).
179. The JAMS Comprehensive Rules grant each party one deposition as of right, and call for
“the necessity of additional depositions . . . [to] be determined by the Arbitrator based upon the
reasonable need for the requested information, the availability of other discovery options and
the burdensomeness of the request on the opposing Parties and the witness.” JAMS RULES,
supra note 35, at R. 17(b). The JAMS Comprehensive Rules do not give any indication about
what happens when the parties have agreed to multiple depositions.
While empowering the Tribunal to “require and facilitate such discovery as it shall determine
is appropriate” taking into account parties’ needs, expeditiousness and cost-effectiveness, the
CPR Rules also do not address the impact of mutual agreement on discovery issues by the par-
ties. CPR RULES, supra note 35, at R. 11. However, the CPR Protocol on Disclosure appears to
anticipate that “[w]here the parties have agreed on discovery depositions, the Tribunal should
exercise its authority to scrutinize and regulated the process . . . [and possibly impose] strict
limits on the length and number of depositions consistent with the demonstrated needs of the
parties.” CPR PROTOCOL, supra note 161, § 5.
180. The Sedona Conference, The Sedona Guidelines: Best Practice Guidelines & Commentary
for Managing Information & Records in the Electronic Age (The Sedona Conference Working
Group Series, Sept. 2005).

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The challenge for arbitrators and arbitration processes is addressing

these concerns effectively in the context of a highly discretionary sys-
tem (without uniform rules or precedents) that is conventionally
aimed at efficiency and expediency in conflict resolution.181 Issues in-
clude the scope or limits of e-discovery and its corresponding burdens
and benefits;182 handling of the costs of retrieval;183 and the duty to
preserve electronic information, spoliation issues, and related sanc-
tions.184 Will it be possible for arbitrators to effectively meet the chal-
lenges of e-discovery in an efficient and relatively economical
manner? The answer depends on the effectiveness of choices made by
counselors and drafters.
Concerns regarding the relative burdens associated with e-discovery
may lead parties to consider adopting language similar to that con-
tained in the ICDR Guidelines, which permit a party to make docu-
ments maintained in electronic form “available in the form . . . most
convenient and economical for it, unless the Tribunal determines, on
application . . . that there is a compelling need for access to the docu-
ments in a different form.”185 Moreover, requests for such documents
“should be narrowly focused and structured to make searching for
them as economical as possible.” The Guidelines conclude by permit-
ting arbitrators to “direct testing or other means of focusing and limit-
ing any search.”186 The use of “test batch production” is emerging as a
critical way of identifying areas that require special attention in ad-
vance of major production.
Parties may avoid many of the costs—if not all the risks—of the
revelation of privileged material in electronic data by agreeing to have

181. See Irene C. Warshauer, Electronic Discovery in Arbitration: Privilege Issues and Spolia-
tion of Evidence, 61 DISP. RESOL. J. 9, 10 (2006-07); Jennifer E. Lacroix, Practical Guidelines for
Managing e-Discovery Without Breaking the Bank, 2 PLI PATENTS, COPYRIGHTS, TRADEMARKS
AND LITERARY PROP. COURSE HANDBOOK SERIES 645-65 (2008); Theodore C. Hirt, The Two-
Tier Discovery Provision of Rule 26(B)(2)(B) – A Reasonable Measure for Controlling Electronic
Discovery? 13 RICH. J. L. & TECH. 12 (2007); Thomas Y. Allman, The “Two-Tiered” Approach
to E-Discovery: Has Rule 26(B)(2)(B) Fulfilled its Promise? 14 RICH. J. L. & TECH. 7 (2008).
182. See generally Sedona Conference, supra note 180.
183. For a discussion of these and other issues, see John B. Tieder, Electronic Discovery and its
Implications for International Arbitration (2007) in 29 THE COMPARATIVE LAW YEARBOOK OF
INTERNATIONAL BUSINESS (Dennis Campbell ed., Kluwer Law International, 2007).
Jessica L. Repa, Adjudicating Beyond the Scope of Ordinary Business: Why the Inaccessibility
Test is Zubulake Unduly Stifles Cost-Shifting During Electronic Discovery, Comment, 54 AM. U.
L. REV. 257 (2004); Warshauer, supra note 180, at 11 (discussing the development of “claw-
back” agreements, which permit a party to produce all of its relevant documents for review
without waiving privilege).
184. Warshauer, supra note 181, at 12-15.
185. ICDR GUIDELINES, supra note 163, § 4.
186. ICDR GUIDELINES, supra note 163, § 4.

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the arbitrators issue a pre-arbitral order relieving the parties of the

obligation to conduct a pre-production review of all electronic docu-
ments for privilege, and ordering that attorney-client and work prod-
uct privileges are not waived by production of documents that have
not been thus reviewed.187 Parties may also wish to consider identify-
ing likely informational needs and agreeing on what information
needs to be preserved, in what format, and for how long.188
A prototypical, multi-faceted template addressing various aspects of
pre-hearing disclosure of electronic information is contained in the
CPR Protocol on Disclosure.189 The Protocol presents parties with
four discrete alternatives regarding pre-hearing disclosure of elec-
tronic documents. The alternatives range from no pre-hearing disclo-
sure, except with respect to copies of printouts of electronic
documents to be presented in the hearing, to full disclosures “as re-
quired/permitted under the Federal Rules of Civil Procedure.” The
intermediate options permit parties to limit production to documents
maintained by a specific number of designated custodians, to limit the
time period for which documents will be produced, to identify the
sources (such as primary storage, back-up servers, back-up tapes, cell
phones, and voicemails) from which production will be made, and to
determine whether information may be obtained by forensic means.190

6. Other considerations
Depending on the circumstances, parties may consider it appropri-
ate to include other provisions, such as a term giving arbitrators ex-

187. Warshauer, supra note 181, at 11.

188. See Sedona Conference, supra note 180, at 11-20, 31-43; William B. Dodero & Thomas J.
Smith, Creating a Strong Foundation for Your Company’s Records Management Practices, 25
ACC DOCKET 52 (2007).
189. See Newman & Zaslowsky, supra note 170.
190. See CPR PROTOCOL, supra note 161, at sched. 2, modes B, C. The Protocol also offers a
set of General Principles which may be adopted by themselves or in tandem with a particular
“mode” for pre-hearing disclosure of electronic documents. It provides:
In making rulings on pre-hearing disclosure, the tribunal should bear in mind the high
cost and burdens associated with compliance with requests for the production of elec-
tronic information. It is frequently recognized that e-mail and other electronically cre-
ated documents found in the active or archived files of key witnesses or in shared drives
used in connection with the matter at issue are more readily accessible and less burden-
some to produce when sought pursuant to reasonably specific requests. Production of
electronic materials from a wide range of users or custodians tends to be costly and
burdensome and should be granted only upon a showing of extraordinary need. Re-
quests for back-up tapes, or fragmented or deleted files should only be granted if the
requesting party can demonstrate a reasonable likelihood that files were deliberately
destroyed or altered by a party in anticipation of litigation or arbitration and outside of
that party’s document-retention policies operated in good faith.
Id § 4(a).

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plicit authority to weigh the burdens and benefits of a discovery

request, or the ability to condition disclosure on the requesting party
paying reasonable costs of production.191 It may serve efficiency to
appoint the chair of the tribunal to serve as discovery master; in cases
in which confidentiality of sensitive information is a primary concern,
a provision for the use of a special master to supervise certain aspects
of discovery may be adopted.192
Drafters should also be aware that discovery relating to third par-
ties may be problematic for parties operating under the aegis of the
Federal Arbitration Act.193 However, some state laws are more ame-
nable to judicial enforcement of third party subpoenas.194 If its appli-
cation is otherwise acceptable, parties may wish to consider a choice
of law provision referencing state law for the purpose of the arbitra-
tion agreement.
Finally, it should be kept in mind that although arbitration hearings
are relatively private, neither standard procedures nor applicable laws
provide a cloak of confidentiality for arbitration-related communica-
tions or events.195 While arbitrators and arbitral institutions have obli-
gations to preserve the privacy of the process under applicable
procedural rules196 and ethical standards,197 and public policies pro-

191. See CPR PROTOCOL, supra note 161, § 1(e)(2).

192. See JAMS RULES, supra note 35, at R. 17(b).
193. Compare Security Life Ins. Co. of America v. Duncanson & Holt, 228 F.3d 865, 872 (8th
Cir. 2000) (allowing arbitrators to issue pre-hearing document subpoenas to third parties); with
Hay Group, Inc. v. E.B.S. Acquisition Corp., 360 F.3d 404 (3d Cir. 2004) (not allowing arbitra-
tors to issue pre-hearing subpoenas, but finding that arbitrators could subpoena non-parties to
appear before them for a pre-merit hearing and bring the documents with them) and Stolt-
Nielsen SA v. Celanese AG, 430 F.3d 567 (2d Cir. 2005) (following Hay Group) cited in Leslie
Trager, The Use of Subpoenas in Arbitration, 62 DISP. RESOL. J. 14 (2007-08).
194. See, e.g., REVISED UNIF. ARB. ACT § 17(b) (2000), available at http://www.law.upenn.
edu/bll/archives/ulc/uarba/arbitrat1213.htm.
195. See generally COMMERCIAL ARBITRATION AT ITS BEST, supra note 21, at ch. 6. See also
Cindy G. Buys, The Tensions Between Confidentiality and Transparency in International Arbitra-
tion, 14 AM. REV. INT’L ARB. 121, 129-31 (2003).
196. For example, the AAA Commercial Rules say, “The arbitrator and the AAA shall main-
tain the privacy of the hearings unless the law provides to the contrary.” AAA COMMERCIAL
RULES, supra note 35, at R. R-23. A more expansive, detailed provision is found in the JAMS
Comprehensive Rules:
JAMS and the Arbitrator shall maintain the confidential nature of the Arbitration pro-
ceeding and the Award, including the Hearing, except as necessary in connection with a
judicial challenge to or enforcement of an Award, or unless otherwise required by law
or judicial decision.
JAMS RULES, supra note 35, at R. 26(a).
197. See, e.g., THE CODE OF ETHICS FOR ARBITRATORS IN COMMERCIAL DISPUTES (2005),
available at http://cpr-prod.ibelongnetworks.com/ClausesRules/ArbitrationEthics/tabid/80/
Default.aspx; CPR-GEORGETOWN COMMISSION ON ETHICS AND STANDARDS OF PRACTICE IN
ADR, PRINCIPLES FOR ADR PROVIDER ORGANIZATIONS (2002), available at http://www.

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442 DEPAUL BUSINESS & COMMERCIAL LAW JOURNAL [Vol. 7:401

tect arbitrators from having to testify,198 parties must contract for

confidentiality if they want to ensure the arbitration remains
confidential.199
Absent a specific agreement, parties and their agents have no obli-
gation to preserve the confidentiality of exchanged documents or arbi-
tration-related communications or events. In fact, the latter may be
disclosed to third parties (including the media), and could be the sub-
ject of third-party discovery in a collateral lawsuit.200 Therefore, par-
ties seeking to protect sensitive or proprietary information usually
request the arbitrators to issue appropriate protective orders or, if mu-
tually acceptable, enter into a post-dispute confidentiality agree-
ment.201 In transactions involving key intellectual property or other
sensitive proprietary information, however, the best course is to take

cpradr.org/Portals/0/finalProvider.pdf; CPR-GEORGETOWN COMMISSION ON ETHICS AND STAN-

DARDS OF PRACTICE IN ADR, PROPOSED MODEL RULE OF PROFESSIONAL CONDUCT FOR THE
LAWYER AS THIRD PARTY NEUTRAL (2002), available at http://www.cpradr.org/Portals/0/CPR
George-ModelRule.pdf.
198. See Maureen A. Weston, Reexamining Arbitral Immunity in an Age of Mandatory and
Professional Arbitration, 88 MINN. L. REV. 449 (2004); See Dennis R. Nolan & Roger I. Abrams,
Arbitral Immunity, 11 Indus. Rel. L.J. 228 (1989).
199. Schmitz, supra note 57, at 1218-19.
200. See, e.g., Lawrence E. Jaffe Pension Plan v. Household Int’l Inc., No. 04-N-1228, 2004
U.S. Dist. LEXIS 16174 (D. Colo. Aug. 12, 2004) (permitting third party discovery because there
was no showing that production would result in unduly harmful disclosures); Industrotech Con-
structors, Inc. v. Duke Univ., 314 S.E.2d 272 (N.C. Ct. App. 1984) (permitting third party discov-
ery of transcripts of arbitration proceeding). See also COMMERCIAL ARBITRATION AT ITS BEST,
supra note 21, at 253, 255; but see Group Health Plan Inc. v. BJC Healthcare Systems, Inc., 30
S.W.3d 198 (Mo. Ct. App. 2000) (finding it was improper for an arbitrator to require a nonparty
to an arbitration to turn over confidential documents from an earlier arbitration).
One set of standard rules that attempts to place non-disclosure obligations on parties is the
CPR Arbitration rules, which provide:
Unless the parties agree otherwise, the parties, the arbitrators and CPR shall treat the
proceedings, any related discovery and the decisions of the Tribunal, as confidential,
except in connection with judicial proceedings ancillary to the arbitration, such as a
judicial challenge to, or enforcement of, an award, and unless otherwise required by
law or to protect the legal right of a party. To the extent possible, any specific issues of
confidentiality should be raised with and resolved by the Tribunal.
CPR RULES, supra note 35, at R. 18. However, parties truly concerned about disclosure of trade
secrets or other sensitive information will want to consider more specific provisions. See COM-
MERCIAL ARBITRATION AT ITS BEST, supra note 21, at 254-63.

201. The JAMS Comprehensive Rules provide, “The Arbitrator may issue orders to protect
the confidentiality of proprietary information, trade secrets or other sensitive information.”
JAMS RULES, supra note 35, at R. 26(b). The AAA Commercial Arbitration Rules empower
arbitrators to “take whatever interim measures he or she deems necessary, including injunctive
relief and measures for the protection or conservation of property.” AAA COMMERCIAL RULES,
supra note 35, at R. R-34(a). The CPR Rules provide that “[t]he Tribunal may issue orders to
protect the confidentiality of proprietary information, trade secrets and other sensitive informa-
tion disclosed in discovery.” CPR RULES, supra note 35, at R. 11.

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specific affirmative steps to ensure confidentiality in arbitration as a

part of initial contract planning.202

D. Avoid Unnecessary Judicial Intrusion

1. Increased cost and cycle time through questionable choice-

making: agreements to expand judicial review

Although increased costs and delays are often a result of business

users’ failures to plan for arbitration by making appropriate process
choices, contract planners may only exacerbate these problems if they
make the wrong choices. A classic example of the latter is a contrac-
tual provision providing for judicial review and vacatur of arbitration
awards for errors of law or fact.203
Consistent with the understanding that arbitration offered busi-
nesses the opportunity to avoid the “needless contention that [is] inci-
dental to the atmosphere of trials in court,”204 Congress in the Federal
Arbitration Act produced a spare legal framework for the judicial en-
forcement of arbitration agreements and awards.205 A keystone of this
structure is the rigorously restrained template for judicial confirma-
tion, modification, or vacatur of arbitration awards.206 This template
includes a narrow statutory imprimatur for vacating awards, limited in
essence to situations where due process was not accorded or where
arbitrators clearly acted in excess of their contractually-defined au-
thority.207 These strictures imbue arbitration awards with a meaning-
ful—or, depending on one’s point of view, an awful—finality. The fear
of being saddled with a truly bad award gives some business lawyers
pause—especially when the potential business consequences are dire.
In recent years, this fear of finality has led to the emergence of a spe-
cies of arbitration agreements calling for more searching judicial scru-

202. See, e.g., INT’L INST. FOR CONFLICT PREVENTION & RESOL CPR RULES FOR NON-AD-
MINISTERED ARBITRATION OF PATENT AND TRADE SECRET DISPUTES R. 17 (2005), available at
http://www.cpradr.org/ClausesRules/PatentRules/tabid/303/Default.aspx; COMMERCIAL ARBI-
TRATION AT ITS BEST, supra note 21, at 259-63 (offering templates including CPR Model Arbi-
tration Confidentiality Agreement and CPR Model Non-Party Confidentiality Agreement).
203. See Stipanowich, New Litigation, supra note 1, at Part I.A.4.
204. Paul L. Sayre, Development of Commercial Arbitration Law, 37 YALE L.J. 595, 614 n.44
(1928).
205. See Stipanowich, Arbitration Penumbra, supra note 49, at 430-34.
206. See Schmitz, Mud Bowl, supra note 55, 189-90.
207. See 9 U.S.C. § 10 (West Supp. 1994). See Stephen L. Hayford, A New Paradigm for Com-
mercial Arbitration: Rethinking the Relationship Between Reasoned Awards and the Judicial Stan-
dards for Vacatur, 66 GEO. W. L. REV. 443 (1998); Stephen L. Hayford, Law in Disarray: Judicial
Standards for Vacatur of Arbitration Awards, 30 GA. L. REV. 731 (1996).

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tiny of awards, including review of awards for errors of law or fact.208

Conceptually, one supposes the result would be a hybrid in which the
benefits of private arbitration would be coupled with the checks and
balances of the civil appellate process. But the sword is double-edged,
and the pitfalls for unwary drafters multiple.
While recent emphasis is on the legalities of contractually expanded
judicial review,209 considerably less attention has been given a more
fundamental question—namely, do contract planners do their clients a
favor by including such provisions in commercial arbitration agree-
ments? The one gathering of experts that directly addressed the issue,
the CPR Commission on the Future of Arbitration, an aggregation of
leading arbitrators and attorneys specializing in arbitration, responded
with a resounding “No!”210 They viewed such provisions as undermin-
ing key conventional benefits of arbitration, including finality, effi-
ciency, economy, and expert decision making.211 Such provisions
would, they believed, increase costs and delay the ultimate resolution
of conflict without commensurate countervailing benefits.212 Moreo-
ver, such provisions pose particular challenges for drafters, both from
the standpoint of creating practical, workable standards for review
and addressing all of the pre- and post-award procedures required to
implement enhanced review.213 This includes: dollar or subject matter
limits on review; the creation of an adequate record; the making of a

208. See Lee Goldman, Contractually Expanded Review of Arbitration Awards, 8 HARV.
NEGOT. L. REV. 171, 183-84 (2003); Dan C. Hulea, Contracting to Expand the Scope of Review of
Foreign Arbitral Awards: An American Perspective, 29 BROOK. J. INT’L L. 313, 351 (2003); Mar-
garet Moses, Can Parties Tell Courts What to Do? Expanded Judicial Review of Arbitral Awards,
52 U. KAN. L. REV. 429, 430-31 (2004); Alan Scott Rau, Contracting Out of the Arbitration Act, 8
AM. REV. INT’L ARB. 225, 230-31 (1997); but see Schmitz, Mud Bowl, supra note 55, 189-90;
Hans Smit, Contractual Modification of the Scope of Judicial Review of Arbitral Awards, 8 AM.
REV. INT’L ARB. 147, 150 (1997).
209. See Schmitz, Mud Bowl, supra note 55, 150.
210. COMMERCIAL ARBITRATION AT ITS BEST, supra note 21, at 291 (summarizing conclu-
sions of CPR Commission).
211. Id.
212. Such provisions were also deemed likely to discourage arbitrators from considering “cre-
ative solutions” that might be questioned by a court. Id. at 288-89. Cf. David Company v. Jim
Miller Constr., Inc., 444 N.W.2d 836 (Minn. 1989). However, one would assume that rational
drafters would only use such provisions in circumstances where a client places a premium on
court-like due process and strict application of the law – in other words, in circumstances where
arbitrators should eschew creativity in favor of doing what a court would do. Moreover, in the
author’s experience commercial arbitration panels—especially those with lawyer members—
tend to be highly sensitive to and guided by legal standards and rarely seek “creative” solutions.
213. See, e.g., Ronald J. Offenkrantz, Negotiating and Drafting the Agreement to Arbitrate in
2003: Insuring against a Failure of Professional Responsibility, 8 HARV. NEG. L. REV. 271, 278
(2003); Kevin A. Sullivan, Comment, The Problems of Permitting Expanded Judicial Review of
Arbitration Awards under the Federal Arbitration Act, 46 ST. LOUIS U. L.J. 509, 548-59 (2002).
See also COMMERCIAL ARBITRATION AT ITS BEST, supra note 21, at 297.

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sufficiently specific award, with an accompanying statement of ratio-

nale and findings of fact or conclusions of law; notice requirements;
the possibility of remand to the original arbitrator(s); and the handling
of related costs.214
The extreme downside of contracting for expanded review in an at-
mosphere of uncertainty regarding the legal propriety and enforce-
ability of such provisions was famously exemplified by the nine-year
battle between LaPine Technology Corporation and Kyocera, over a
1994 award in an International Chamber of Commerce (ICC) arbitra-
tion proceeding, a parade of horrors punctuated by two decisions of
the Ninth Circuit. In LaPine Technology Corp. v. Kyocera,215 the court
concluded that it was obliged to honor the parties’ agreement that any
arbitration award would be subject to judicial review for errors of fact
or law since controlling Supreme Court precedents made “it clear that
the primary purpose of the FAA is to ensure enforcement of private
agreements to arbitrate, in accordance with the agreement’s terms.”216
After six more years of legal maneuvering before the district court
and the original arbitration panel, the Ninth Circuit reconsidered its
original decision en banc, and reversed itself, declaring that enforcing
expanded review provisions (such as those before it) would “rende[r]
informal arbitration merely a prelude to a more cumbersome and
time-consuming judicial review process.”217
Compounding the drafter’s dilemma is the fact that such provisions
have not been uniformly embraced by federal and state courts. The
federal circuits split regarding whether expansion of the FAA grounds
for judicial review was permissible.218 State court decisions also reflect
a divergence of authority.219

214. Id.
215. 130 F.3d 884 (9th Cir. 1997) (attorneys were able to provide for expanded judicial review
in the arbitration clause that they drafted), overruled by Kyocera Corp. v. Prudential-Bache
Trade Servs., Inc., 341 F.3d 987, 1000 (2003).
216. Kyocera, 130 F.3d at 888.
217. Id. at 998.
218. Five circuit courts came down in favor of enforcement. See Puerto Rico Tele. Co., Inc. v.
U.S. Phone Mfg. Corp., 427 F.3d 21, 30-31 (1st Cir. 2005); Rodway Package Sys., Inc. v. Kayser,
257 F.3d 287, 293 (3d Cir. 2001); Syncor Int’l Corp. v. McLeland, 120 F.3d 262 (4th Cir. 1997);
Gateway Technologies, Inc. v. MCI Telecomms. Corp., 64 F.3d 993, 996-97 (5th Cir. 1995); Ja-
cada (Europe), Ltd. v. Int’l Mktg. Strategies, Inc., 401 F.3d 701, 710-12 (6th Cir. 2005). Four
circuits reached a contrary conclusion. See Chicago Typographical Union No. 16 v. Chicago Sun-
Times, Inc., 935 F.2d 1501, 1505 (7th Cir. 1991); UHC Management Co., Inc. v. Computer Scis.
Corp., 148 F.3d 992, 997-98 (8th Cir. 1998); Kyocera Corp. v. Prudential-Bache Trade Servs., Inc.,
341 F.3d 987, 1000 (9th Cir. 2003), overruling LaPine Tech. Corp. v. Kyocera Corp., 130 F.3d 884,
888 (9th Cir. 1997); Bowen v. Amoco Pipeline Co., 254 F.3d 925, 935-37 (10th Cir. 2001).
219. Decisions favoring enforcement include Cable Connection, Inc. v. DIRECTV, Inc., 190
P.3d 586 (Cal. Ct. App. 2008); NAB Constr. Corp. v. Metropolitan Transp. Auth.,579 N.Y.S.2d

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In Hall Street Associates, L.L.C. v. Mattel, Inc.,220 the U.S. Supreme

Court held that the Federal Arbitration Act (FAA) does not permit
parties to expand the scope of judicial review of arbitration awards by
agreement. In Justice Souter’s written opinion, which was joined by
five other justices, he declared that the grounds for judicial review of
arbitration awards set forth in §§ 10–11 of the FAA are the exclusive
sources of judicial review under that statute.221 Moreover, the FAA’s
provisions for confirmation (vacatur and modification) should be
viewed as “substantiating a national policy favoring arbitration with
just the limited review needed to maintain arbitration’s essential vir-
tue of resolving disputes straightaway.”222
Having strained mightily to nail down the coffin-lid on contractually
expanded review under the FAA, the Court affirmatively invited con-
sideration of other avenues to the same ends,223 such as where parties
“contemplate enforcement under state statutory or common law . . .
where judicial review of different scope is arguable.”224 Although the

375, 375 (N.Y. App. Div. 1992) (enforcing contractual provision permitting judicial review of an
arbitration award “limited to the question of whether or not the [designated decision maker
under an alternative dispute resolution procedure] is arbitrary, capricious or so grossly errone-
ous to evidence bad faith.”). Other state courts have found no room under arbitration statutes
for expanded review. Dick v. Dick, 534 N.W.2d 185, 191 (Mich. Ct. App. 1994) (contractual opt-
in provision permitting appeal to the courts of “substantive issues” relating to the award at-
tempted to create “a hybrid form of arbitration” that [“did] not comport with the requirements
of the [Michigan] arbitration statute.”); Chi. Southshore & South Bend Railroad v. Northern
Ind. Commuter Transp. Dist., 682 N.E.2d 156, 159 (Ill. App. 3d 1997), rev’d, 184 Ill. 151 (1998)
(denying effect to term permitting a party claiming that arbitrator’s award was based upon an
error of law “to initiate an action at law . . . to determine such legal issue”; concluding that “[t]he
subject matter jurisdiction of the trial court to review an arbitration award is limited and circum-
scribed by statute.”).
New Jersey has addressed the issue by statute, providing for parties to arbitration agreements
to “opt in” to a heightened standard of review established by the statute. New Jersey Alternative
Dispute Resolution Act, N.J. STAT. ANN. 2A §§ 23A-12 (1999). The drafters of the Revised
Uniform Arbitration Act (RUAA) considered and rejected such an approach, declining to estab-
lish any explicit basis for expanded review under that uniform act. See REVISED UNIF. ARB. ACT
§ 23 cmt. B (2000).
220. 128 S. Ct. 1396, 1404-05 (2008).
221. Id. at 1403.
222. “Any other reading [would open] the door to full-bore legal and evidentiary appeals that
can ‘rende[r] informal arbitration merely a prelude to a more cumbersome and time-consuming
judicial review process.” Id. (quoting Kyocera, 341 F.3d at 998).
223. In a highly unusual move, the Court had requested additional briefing on these issues
after the initial arguments; its March decision concluded that the supplemental arguments raised
new points which required a remand for the development of the issues. The Ninth Circuit subse-
quently issued a remand order to the district court, concluding that the High Court decision
“preserved the issue of sources of authority, other than the Federal Arbitration Act, through
which a court may enforce an arbitration award.” Hall Street Assocs. LLC v. Mattel Inc., 531
F.3d 1019 (9th Cir. 2008).
224. Mattel, 128 S. Ct. at 1406.

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full import of this invitation is yet to be clarified, state statutes or con-

trolling judicial decisions promoting contractually expanded review
will likely become “safe harbors” for such activity. New Jersey is per-
haps the sole example of a statutory template for parties that wish to
“opt in” to the legislative framework for elevated scrutiny of
awards.225 In Cable Connection, Inc. v. DIRECTV, Inc.,226 California’s
highest court recognized a more general “safe harbor” for contractu-
ally expanded judicial review under that state’s arbitration law.
The foregoing survey of the complex legal landscape surrounding
contractually expanded judicial review illustrates the uncertainties
confronting those seeking to include such provisions in their arbitra-
tion agreements.227 In some types of cases, contract planners may con-
clude that the difficulty of securing judicial oversight of arbitration
awards requires them to forego arbitration entirely.

2. Alternatives to expanded judicial review;

appellate arbitration processes
However, there are other less radical alternatives to expanded judi-
cial review. These include identifying arbitrators who are likely to de-
liver an authoritative and rational decision, requiring the arbitrators
to produce a detailed rationale for their awards, and placing limits on
awards of monetary damages (including upper and lower limits for the
award, a baseball arbitration format requiring arbitrators to make a
choice between two alternative monetary awards, and a prohibition
on certain kinds of relief, such as punitive damages).228 For those
seeking a close analogue to judicial review, however, an appellate ar-
bitration procedure may be the most suitable alternative.
Appellate arbitration procedures afford parties the opportunity of a
“second look” at an arbitration award in a controlled setting while

225. See supra note 218.

226. 190 P.3d at 586.
227. In addition to addressing the impact of federal and state law respecting the enforceability
of provisions for expanded review, parties should pay close attention to scope and procedural
issues. If provisions of this kind are ever to provide benefit, it is probably in high-dollar or “bet-
the-company” disputes. Usually, the focus will be on addressing errors of law where legal issues
play a prominent part in the dispute. Drafters are well advised to choose very carefully among
standards for judicial review for legal error. A separate determination should be made regarding
the need for judicial review of findings of fact. Consideration should also be give to all of the
other pre- and post-award procedures required to implement enhanced review, including the
nature of the record of arbitration proceedings, the format of the award, notice requirements,
the possibility of remand to the original arbitrator(s) or the empanelling of new arbitrators, and
the handling of costs (including possible cost-shifting). See COMMERCIAL ARBITRATION AT ITS
BEST, supra note 21, at 291-304.
228. See id. at 277-81.

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avoiding the delays and legal uncertainties associated with expanded

judicial review. Since properly constituted agreements for “second-
tier” arbitration are as enforceable as any other arbitration agree-
ments, so are the resulting awards.229 Appellate arbitration proce-
dures have been utilized in a variety of commercial contexts, and at
least two major institutions,230 the International Institute for Conflict
Prevention & Resolution and JAMS, have published appellate arbitra-
tion rules for utilization in commercial cases.231
Crafting an appropriate arbitral appeal process involves the consid-
eration of numerous procedural issues, including the qualifications of
the appellate panel and method of its selection; scope limits on ap-
pealable disputes; filing requirements; administrative fees; time limits
on filing and appellate procedures; applicable standards of review; the
type of record that will be maintained of the original arbitration hear-
ing and transmitted to the appellate panel; the format of the original
arbitration award; the form of argument on appeal (written, oral, or
both); the remedial authority of the appellate panel; the possibility of
remand of the award to the original panel or to a different panel; and
the handling of costs, including the potential shifting of costs if an ap-
peal is unsuccessful.232 Given the transaction costs associated with
their formulation, fully customized appellate rules are probably feasi-
ble only in exceptional cases (such as long-term relationships or large-
scale business transactions). In most cases, parties will probably want
to rely on existing institutional models.233

E. Select Service Providers that “Get It”

1. Dispute resolution institutions
An administrative framework for arbitration (as well as preliminary
steps, notably mediation) is among the most critical choices made by
parties drafting dispute resolution agreements. While arbitration need
not be “administered,” many business parties prefer to incorporate
the rules of an administering institution or “provider organization” in
their agreement. Whether to seek administration and the selection of

229. See, e.g, Cummings v. Future Nissan, 128 Cal.App.4th 321 (Cal. Ct. App. 2005) (affirming
lower court order confirming award by appellate arbitrator).
230. See COMMERCIAL ARBITRATION AT ITS BEST, supra note 21, at 299-300.
231. See INT’L INST. FOR CONFLICT PREVENTION & RESOLUTION CPR ARBITRATION APPEAL
PROCEDURE (1999); JAMS ARBITRATION APPEAL PROCEDURE (2003), available at http://www.
jamsadr.com/rules/optional.asp.
232. See COMMERCIAL ARBITRATION AT ITS BEST, supra note 21, at 298-304. See also Paul
Bennett Marrow, A Practical Approach to Affording Review of Commercial Arbitration Awards:
Using an Appellate Arbitrator, 60 DISP. RESOL. J. 10 (2005).
233. See supra Part II.B.5.

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an administrative framework should depend on the client’s needs and

specific circumstances.
By incorporating institutional arbitration rules in their agreement,
parties establish guidelines for conduct of the processes: a “safety net”
of default rules that come into play in the absence of a contrary agree-
ment. Rules plug users into an administrative framework that nor-
mally includes support staff to help select arbitrators and facilitate
other aspects of arbitration, and a panel or stable of neutrals from
which arbitrators can be selected for specific cases. Rules normally
establish a right to, and mechanism for, payment of service providers,
and tend to reinforce arbitral immunities. The scope of administrative
support, however, varies greatly among institutions, from very limited
support (as in the CPR Rules, which limit CPR involvement to ap-
pointing arbitrators where required) to ICC-style administration.234
Although administrative services typically entail fees and costs, at
least two elements are probably indispensable for most parties: a
ready-made set of procedures (obviating the need to draft) and an
authority designated to appoint arbitrators in the absence of agree-
ment.235 Beyond this, not all parties need the same level or kind of
administrative support. Depending on a party’s goals, different ques-
tions should be considered when selecting an administering
institution.
Parties seeking cost savings, efficiency, and avoidance of undue de-
lay might consider the following:
• Does the institution offer mediation services, or other ADR ser-
vices (such as nonbinding advisory opinions), that might be use-
ful in settling disputes before resorting to binding arbitration?
• If the size and complexity of possible disputes under a contract is
likely to vary, is more than one set of arbitration procedures
necessary? Would expedited arbitration procedures be benefi-
cial for certain classes of disputes? Does the institution publish
such rules? What other procedures, such as provisions for a pre-
hearing conference, may promote economy and efficiency?236
• If, as is usually the case, the parties need assistance in selecting
arbitrators, does the institution sponsor a panel or list of arbitra-
tors? If so, does the list include competent arbitrators who are
nearby? Are the people on the panel noted for their ability to
manage hearings quickly and efficiently? If a mix of expertise is
appropriate, are arbitrators of relevant expertise available
through the institution?

234. CPR RULES, supra note 35, at R. 6.

235. See id.; UNCITRAL MODEL LAW ON INT’L COMMERCIAL CONCILIATION (2002), availa-
ble at www.uncitral.org [hereinafter UNICITRAL MODEL LAW].
236. See infra Part II.E.5.

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• Will efficiency be best served by having minimal administration

(in which the administering institution’s functions are limited to
providing a set of procedures and serving as an appointing au-
thority), thereby relying on arbitrators to manage the proceed-
ing unaided? Alternatively, is a separate administrative entity
necessary to: set up initial meetings; handle correspondence; su-
pervise the reimbursement of arbitrator fees and expenses; and
ensure the award is final, complete, and in proper form? What
functions does the administering institution offer, and what is
the reputation of its staff for providing prompt and competent
service?

2. Individual neutrals

It has been said that “the arbitrator is the process.”237 This is not
mere hyperbole. While the appropriate institutional and procedural
frameworks are often critical to crafting better solutions for business
parties in arbitration, the selection of an appropriate arbitrator or ar-
bitration tribunal is the most important choice confronting parties in
arbitration.238 A misstep in the choice of arbitrators may undermine
many other good choices.
An arbitral institution should never be chosen without ascertaining
whether the institution’s panel or list of neutrals have the requisite
experience, abilities, and skills. To inform and channel the eventual
selection process, moreover, it may be appropriate to prepare reason-
able guidelines for the choice of neutrals for particular kinds of dis-
putes. In considering candidates, some or all of the following may be
relevant: legal, professional, commercial, or technical background; no-
tability;239 hearing management experience and skills, attitudes about
arbitration; and current schedule and availability.
Again, the relevant questions depend on goals and priorities. If
those priorities include low cost, efficiencies, and the avoidance of un-
due delay, the following queries may be helpful:

237. See, e.g., Stipanowich, Rethinking, supra note 95, at 478.

238. JAY FOLBERG, ET AL., RESOLVING DISPUTES—THEORY, PRACTICE & LAW 470-73 (2008)
(“the choice of arbitrators [is] critical for two reasons: They will likely provide the only review of
the case’s merits, and arbitrators will have primary control over the process itself.”).
239. Notability may be especially desirable if familiarity with the norms and practices of the
industry is needed. Int’l Produce, Inc. v. A/S Rosshavet, 638 F.2d 548, 551-52 (2d Cir. 1981)
(“The most sought-after arbitrators are those who are prominent and experienced members of
the specific business community in which the dispute to be arbitrated arose.”); Charles J.
Moxley, Jr., Selecting the Ideal Arbitrator, 60 DISP. RESOL. J. 24, 27 (2005) (prominence of arbi-
trator increases confidence in the process).

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2009] ARBITRATION AND CHOICE 451

• Would a single arbitrator be sufficient for select classes or kinds

of disputes?240
• Does the prospective arbitrator (or chair of the arbitration tribu-
nal) have experience in process management, and does that ex-
perience reflect well on that arbitrator’s ability to supervise an
efficient, economical process?
• Is the prospective arbitrator committed to the concept of pro-
moting economies and efficiencies throughout the process?
• Is the prospect available for expedited hearings or for hearings
over the coming months?
It is reasonable for parties to expect arbitrators to give them what
they bargained for.241 While arbitrators should always seek to pro-
mote efficiency and economy in the absence of a contrary agreement,
clear contractual language emphasizing the primacy of such expecta-
tions should give rise to special effort on their part.242
Arbitrators may promote economy and efficiency in many ways,
including:
• Making expectations about speed and cost-saving clear at the
outset of the process by emphasizing the firmness of the sched-
ule and granting continuances only for good cause;243
• Functioning as role models (cooperating with other arbitrators,
including party-arbitrators; avoiding scheduling conflicts when-
ever possible);244
• Actively managing the process, beginning with a pre-hearing
conference resulting in an initial procedural order and timetable
for the entire arbitration;245
• Simplifying arrangements for communication, including the
elimination of unnecessary communications through case admin-
istrators or third parties;246
• Simplifying, clarifying, and prioritizing issues;247
• Addressing jurisdictional issues and reasonable requests for in-
terim relief as soon as practicable;248
• Facilitating and actively monitoring information exchange/
discovery;249

240. H. Henn, Where Should You Litigate Your Business Dispute? In an Arbitration? Or
Through the Courts? 59 DISP. RESOL. J. 34, 37 (2004); COMMERCIAL ARBITRATION AT ITS BEST,
supra note 21, at 46.
241. See John Tackaberry, Flexing the Knotted Oak: English Arbitration’s Task and Opportu-
nity in the First Decade of the New Century, SOC’Y OF CONSTRUCTION L. PAPERS, May 2002, at 3.
242. See supra text Part III.B., III.C.
243. See Chang, supra note 138; COMMERCIAL ARBITRATION AT ITS BEST, supra note 21, at
215-20.
244. COMMERCIAL ARBITRATION AT ITS BEST, supra note 21, at 6-8.
245. CCA GUIDE TO BEST PRACTICES, supra note 139, at 8, 17, 33-37.
246. Id. at 88.
247. Id.
248. Id. at 82, 104, 106.
249. Id. at 87.

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• Employing electronic means of communication and document

management as appropriate;250
• Scheduling hearings with as few interruptions as possible;251
• Planning and actively managing the hearings (beginning and
ending each hearing day with housekeeping sessions);252 and
• Anticipating potential problems (such as the unavailability of
witnesses, unanticipated circumstances) and seeking creative so-
lutions to minimize delay.253

3. Dispute resolution counsel

An international organization recently sponsored a competition

among major law firms with the aim of identifying a firm whose prac-
tice embodied effective methods of managing and resolving business-
related disputes.254 The entries revealed very different conceptions of
what constitutes effective dispute resolution. Some firms simply
touted big court victories and others focused on their expertise in
commercial arbitration. Still others portrayed a varied practice em-
ploying different approaches, including early case assessment, negotia-
tion, mediation, arbitration, and litigation to address particular client
needs.
Business clients often rely heavily on outside counsel to represent
their interests in the management of conflict, including arbitration.
These advocates have as much to do with the realization of a client’s
goals and expectations as procedures, administrative framework, or
neutrals. The wide variation in approaches to conflict inevitably
means some law firms—and lawyers—will be more suitable for partic-
ular clients—and particular circumstances—than others. Selection of a
law firm or lawyer that lacks the willingness or capability to align itself
with the client’s goals may undermine the most careful contract
planning.
Unless a legal dispute is inevitably destined for the courtroom,
something beyond litigation experience is essential in outside counsel.
Litigation experience is not in itself sufficient to qualify one as arbitra-
tion counsel—the legal and practical differences are simply too great.
Moreover, as our discussion of varied client goals reveals, arbitration
and court trial are very often appropriately relegated to a secondary
or tertiary role, forming a backdrop or backstop for efforts at informal

250. CCA GUIDE TO BEST PRACTICE, supra note 139, at 121.

251. Id. at 153.
252. Id. at 133.
253. Id. at 94.
254. The author was among the judges.

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dispute resolution.255 With that in mind, counsel should ensure they

are capable of understanding and fulfilling a client’s specific goals and
priorities in addressing disputes. Consider the following list of ques-
tions that might be asked before retaining counsel to resolve a
dispute:
• Do you have experience helping clients consider the appropri-
ateness of options for early resolution of disputes? What options
do you discuss?
• What methods do you use to analyze options?
• Do you undertake such analyses prior to commencing
discovery?
• What is your experience with, and attitude toward, negotiated
resolution of disputes? With mediated negotiation?
• Have you had formal training in negotiation or mediation theory
and practice?
• What is your experience with commercial arbitration, including
arbitration under the relevant procedures and administrative
framework?256 Are you familiar with the case managers or case
administrators for this matter?
• Are you familiar with the provider institution’s list of
arbitrators?
• Are you familiar with applicable ethics rules, if any?
• How does your arbitration advocacy differ from your advocacy
in litigation?
• What techniques have you found to be most effective in promot-
ing efficiency and economy in commercial arbitration?
• What experience have you had negotiating, arbitrating, or liti-
gating with opposing counsel? What is the nature of your
relationship?
• What professional service models do you employ other than
hourly fees? Are you willing to explore incentives for early
settlement?
Even after vouchsafing the role of advocate to appropriate outside
counsel, a prudent client or inside counsel will continue to be involved
in the conflict resolution process. This means being present at key de-
cision points before and during arbitration, including pre-hearing con-
ferences, during which the timetable and format for the arbitration are
discussed and established.257

255. COMMERCIAL ARBITRATION AT ITS BEST, supra note 21, at 5-6, 10-33, 39-41.
256. Depending on the circumstances, this might include an exploration of experience with
expedited rules; rules for large or complex arbitration, or appellate arbitration rules.
257. See Casey & Parker, supra note 147; COMMERCIAL ARBITRATION AT ITS BEST, supra
note 21, at 183-90.

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IV. CONCLUSION
Choice—the opportunity to tailor procedures to business goals and
priorities—is the fundamental advantage of arbitration over litigation.
The freedom to choose, and key resulting differences between con-
tract-based arbitration and court trial, explain why most business
users prefer arbitration when resolving commercial disputes.258 For
the same reason, it is hard to understand why many users are so vocal
in their criticism of arbitration.
Business users who have reason to complain about the arbitration
experience should look first and foremost to the choices they made—
or failed to make—from the inception of contract planning through
the arbitration process. For those who place high value on economy
and efficiency in arbitration, the return to fundamentals should begin
with identification of key client goals and priorities, and seeking or
formulating a process amenable to those ends. Choice-making should
also take into account emerging templates for streamlined processes,
and for limitations on the scope of discovery. Those concerned about
limitations on the judicial scrutiny of awards should carefully consider
their options, and forego the problematic and costly avenue of ex-
panded judicial review in favor of alternatives such as appellate arbi-
tration. Finally, users should employ greater discernment in selecting
those service providers who are primary determinants of the arbitra-
tion experience: administering institutions, arbitrators, and advocates.
For in the increasingly sophisticated world of conflict management
choices, knowledge, experience, and sound judgment are more critical
than ever.

258. See supra note 3.

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